Whales' Conviction Doesn't Confirm Full Market Recovery

Bitcoin's recent recovery has led to an increase in profitable supply, but experts say it doesn't necessarily confirm that the market is fully recovered yet. According to data from CryptoQuant, the profit-to-loss ratio for Bitcoin has increased from 46.2% on June 30th to 58% on July 21st, with over 10% of the circulating supply realizing profits in that time period.

However, this level is still below previous cycle highs of around 69%, 64%, 83%, and 77%. Long-term holders are continuing to accumulate, while short-term holders have been selling close to their cost basis. This combination suggests that selling pressure is easing, but Bitcoin still needs profitability to reach the 60% to 65% range before matching previous recovery structures.

Whale profitability also suggests growing conviction in the market. Holders of 100-1,000 BTC have moved back into unrealized profit, and the largest groups of whales have remained profitable throughout the decline with only minor drops in profitability. This pattern mirrors previous recoveries, but historically whale profitability becomes more relevant when it coincides with continuous accumulation.

The recent pullback has not invalidated Bitcoin's improving on-chain backdrop, and price continues to defend the $64,000 region. However, a loss of this level would weaken the outlook and increase the risk of deeper profit-taking before buyers attempt another move toward $66,700 resistance again.