On-chain data reveals what percentage of the entire Bitcoin userbase is still carrying a profit following the latest crash in the asset’s price.
Bitcoin Has This Many Addresses Still Holding Net Gains
In a new post on X, the market intelligence platform IntoTheBlock has discussed about the profit-loss status of the Bitcoin investors after the crash that the cryptocurrency has seen.
The indicator of interest here is the “Historical In/Out of the Money,” which uses on-chain data to determine the percentage breakdown of addresses on the network that are carrying profits and losses.
This metric works by going through the transaction history of each address on the network to find the average price at which it purchased its coins. If this cost basis for any address is less than the asset’s current spot value, then that particular address could be assumed to be holding a net unrealized profit.
Similarly, the wallets of the opposite kind could be considered to be underwater. IntoTheBlock defines the former type of addresses to be “in the money,” while the latter ones as “out of the money.”
The addresses that have their cost basis coinciding with the cryptocurrency’s latest price are naturally just breaking even on their investment or are “at the money.”
Now, here is the chart shared by the analytics firm that shows the trend in the Historical In/Out of the Money since the start of the year:
Looks like the percentage of addresses carrying profits has been going down recently | Source: IntoTheBlock on X
As is visible in the above graph, a high number of Bitcoin addresses has generally been in profit throughout the year, a product of the rally that the cryptocurrency’s price has witnessed in this window.
The latest crash to the $50,000 level, however, has shaken things up, as a notable amount of investors have now gone into loss. Around 75% of the user base is currently in the money, equivalent to 39 million addresses.
The last time BTC saw similar levels of investor profitability was back in January. Interestingly, the cryptocurrency reached a bottom around the $39,000 mark when the profit-loss ratio fell to these levels.
Bitcoin reaching bottoms when holder profitability is low has actually been something observed throughout history. The investors in profit are more likely to sell their coins, so a large amount of them being in the green can raise the possibility of a mass selloff. However, on the contrary, their going down can reduce the risk of selling for the motive of profit-taking. This is why the asset has had an easier time turning around when profitability has fallen low enough.
Naturally, 75% of addresses being in profit is not actually a low value, but during bullish periods, it has been deep enough to lead to bottoms, as demand for absorbing selling is usually high in such times anyway.
It now only remains to be seen if the current Bitcoin profitability will end the bleed like in January, or if there is more to come still.
BTC Price
At the time of writing, Bitcoin is floating around $50,100, down more than 28% over the past week.
The price of the coin appears to have been sliding down over the last few days | Source: BTCUSD on TradingView