Bitcoin Bulls Retain Profit Despite 27% Drop from $125K Peak

Bitcoin (BTC) has experienced a significant downturn, correcting approximately 27% from its recent all-time high of $125,000 down to the $90,000 range. However, despite this sharp pullback, market analysis suggests that a majority of investors remain in profit, preventing a full-scale market capitulation.

According to data from market analytics firm Adler AM, a robust 67% of the cryptocurrency’s total circulating supply is still trading above its acquisition price. This metric, known as the “supply in profit,” is crucial for gauging market strength and investor resilience following major corrections.

Holding Above the Critical Capitulation Threshold

The current 67% supply in profit figure is a key indicator that the market is not yet signaling a deep bear phase. The metric remains well above the crucial 50% threshold, which analysts consider the “capitulation” line. For comparison, during the 2023 market bottom, this indicator plunged to 46%, signaling peak investor fear and loss.

The current situation mirrors the conditions observed at the beginning of a prolonged correction period in 2022 rather than a full market top. Analysts suggest that as long as the profitability metric stays above 50%, the overall market structure can only be deemed moderately bearish. A definitive break below this critical level would likely indicate a rapid escalation of downside risk and selling pressure.

Market Drawdown Recovers and Forms Base

The correction saw a peak drawdown of 35% from the October all-time high, but this has since recovered to the current 27.6% level, indicating a stabilization process is underway. This reduction in the drawdown suggests the formation of a local short-term base.

Price action has shown attempts at stabilization following the volatile November period, with short-term moving averages now beginning to turn upward. The ability of the market to retain two-thirds of its supply in profit, despite the large price drop, showcases resilience and indicates a balancing act between sustained selling pressure and determined efforts to establish a sustainable local bottom.