Bitcoin investors are once again seeing a majority of holdings in profit, as supply profitability has recently improved. However, experts from the onchain analytics firm CryptoQuant caution that these gains alone do not signal the beginning of a new bull market.
Profitability metrics trend upward
CryptoQuant, a firm specializing in onchain cryptocurrency data analysis, has indicated that Bitcoin’s “supply in profit”—the percentage of coins worth more than their acquisition price—climbed to 57.5% as of July 22. This figure has rebounded notably from 46.2% registered on June 30, marking the lowest level of 2026 so far.
This increase in profitability means nearly 60% of the circulating Bitcoin supply currently holds unrealized gains. The trend suggests an improving market environment compared to recent weeks when more than half of Bitcoin’s supply remained underwater.
A CryptoQuant contributor known as thechessONCHAIN emphasized that a sustained and robust upswing is needed before analysts can confirm the start of a broader market recovery. Similar past surges have reversed before consolidating into long-term gains.
Long-term holder behavior remains crucial
The spent output profit ratio (SOPR) of long-term holders, or LTHs—investors who have kept their Bitcoin unspent for at least six months—has also seen signs of improvement. SOPR is a metric tracking whether these coins are moved onchain at a profit or loss. A reading above 1.0 means coins are being sold at a profit, while values below 1.0 often point to holders capitulating and selling at a loss.
Despite the uptick in profitability, onchain losses for long-term holders continue to outweigh the gains. The 30-day simple moving average (SMA) of LTH-SOPR currently remains below 1, signaling that long-term holders are still predominantly realizing losses as they move bitcoin onchain.
Mini dictionary: Long-term Holder (LTH): This term refers to entities or addresses that have held Bitcoin for six months or more without moving or selling it. Their behavior is considered a key indicator for potential long-term trends in the Bitcoin market.
Key thresholds for bull market confirmation
According to thechessONCHAIN, in previous bear markets a confirmed recovery only took place when two core requirements were met: a sustained LTH-SOPR average above 1 over several weeks, and at least 64% of supply in profit. The latest cycle has yet to fulfill these criteria.
The pattern seen this year includes a failed breakout attempt in late April, when LTH-SOPR held above 1.0 for 35 days and supply in profit touched 67%. Both indicators subsequently retreated, and the LTH-SOPR 30-day SMA has now remained below 1 for more than 50 consecutive days.
Previous bear markets only ended after the percentage of profitable supply held above 64%, and the LTH-SOPR stayed above 1 for weeks, according to onchain analysis by CryptoQuant contributor thechessONCHAIN.
Earlier this summer, Bitcoin supply in loss crossed the 50% threshold, a dynamic that historically has marked the lead-up to bear market bottoms.
Mixed signals from demand and market sentiment
Current market demand indicators show a divided landscape. While spot-market investor interest remains muted, institutional allocation to Bitcoin has begun to recover. Some analysts see these mixed signals as characteristic of the later stages of a bear market cycle.
The overlap in profitability patterns and long-term holder losses with previous market cycles points to potential for further volatility. Nonetheless, as profitability gradually increases, participants continue to monitor for sustained signals of a genuine market turnaround.
