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Bitcoin retreats from $125k high but most supply remains profitable
Bitcoin has corrected from an early-October peak near $125,000, sliding roughly 27% to around $90,000. Despite this pullback, market analytics from Adler AM show about 67% of BTC supply is still trading above holders' acquisition prices — a sign that the broader market is not yet deep into capitulation.
Supply-in-profit metric points to moderate bearishness
The supply-in-profit indicator, which measures the share of circulating Bitcoin currently above purchase price, remains above the crucial 50% threshold. Adler AM notes that during the 2023 market bottom the reading fell to about 46%, while values today look more like the early stages of a longer correction such as the one experienced in 2022 rather than a full-blown market top.
That lingering profitability across two-thirds of the supply suggests selling pressure is present but not yet overwhelming. Analysts emphasize that, while the market structure is leaning moderately bearish, a decisive drop in profitable supply below the 50% “capitulation” line would materially increase downside risk and could accelerate a deeper correction.
Technicals and drawdown recovery
Bitcoin’s peak drawdown after the $125k high briefly reached around 35% before rebounding to a roughly 27.6% decline. Short-term moving averages have begun to turn upward, implying that a local base may be forming. This technical rebound, coupled with the still-high proportion of supply in profit, supports the narrative of stabilization rather than immediate collapse.
Where risks lie
Key risk factors include a renewed wave of selling that pushes the supply-in-profit measure below 50%, or fresh negative macro shocks that widen the drawdown. If either occurs, market structure could quickly shift from moderate bearish to deeper bear-market dynamics. Conversely, continued ETF inflows and improving short-term moving averages would strengthen the case for consolidation and a potential resumption of the uptrend.
What traders should watch
- Supply-in-profit: Holds the best signal for a shift toward capitulation.
- Short-term moving averages: Early rises hint at stabilization.
- ETF flows: Net inflows to spot BTC ETFs can provide underlying bid support.
Adler AM provided the trading and on-chain data used in the analysis. For market participants, the current combination of a recovered drawdown and a supply-in-profit reading above 50% suggests caution: the market may be forming a local floor, but the risk of a deeper correction remains if key metrics deteriorate.
Bitcoin trading data was provided by market analytics firm Adler AM.
Source: crypto
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