Bitcoin nears bottom as supply profitability climbs to 57.5%

On-chain data suggests Bitcoin may be approaching a cycle bottom, though a failed recovery in June shows the market has not yet confirmed a new bull trend.

Bitcoin's supply in profit rebounded to 57.5% on July 22, up from a 2026 low of 46.2% on June 30, according to CryptoQuant. The metric measures the share of Bitcoin worth more than its acquisition price — nearly 60% of the circulating supply is now held at a profit.

"This cycle already produced one failed attempt — from April 28 to June 1 the LTH-SOPR average held above 1.0 for 35 days, Supply in Profit reached 67%, and both rolled back over," CryptoQuant contributor thechessONCHAIN said.

The 30-day simple moving average of the long-term holder spent output profit ratio must remain above 1.0 without falling below that level for weeks, while total supply in profit needs to exceed 64% for a bull market confirmation, the analyst noted. LTH-SOPR measures the proportion of coins moving onchain at a higher price relative to their previous transaction — values above 1 indicate coins moving mostly in profit, while values below 1 suggest capitulatory activity. Bitcoin's supply in loss crossed the 50% mark in June, a threshold that has historically preceded bear-market bottoms in previous cycles, including the 2022 and 2018 downturns.

If the current recovery follows historical precedent, a confirmed bottom could lead to substantial upside — Bitcoin gained 655% the last time the supply-in-profit metric dropped to 50%. The key test is whether on-chain metrics can sustain above breakeven thresholds after the failed April-to-June attempt, which saw both LTH-SOPR and supply in profit roll back after briefly meeting bull-market conditions.

Hyperliquid Stands Out as Bullish Exception

While Bitcoin's on-chain data points toward stabilization, the broader market remains under pressure. Weak retail participation and prolonged corrections across numerous altcoins have defined the mid-2026 market environment. Against this backdrop, Hyperliquid has emerged as a notable bullish outlier, with the decentralized perpetuals exchange continuing to attract activity even as other DeFi protocols face headwinds. The platform's sustained traction suggests selective capital rotation toward protocols with proven revenue models, even during broader market fatigue. Hyperliquid's resilience stands in contrast to the broader altcoin market, where many tokens have struggled to hold recent gains as trading volumes and user engagement have declined across multiple chains.

What to Watch Next

The failed recovery from April to June shows the fragility of the current setup. For Bitcoin to confirm a new bull cycle, the LTH-SOPR 30-day SMA must hold above 1.0 and supply in profit must break and stay above 64%. Until both conditions are met, the market remains in a stabilization phase rather than a full recovery. Traders should watch whether the current supply-in-profit trajectory can sustain above 60% in the coming weeks — a drop back below 50% would point to further downside risk and invalidate the bottoming thesis. The next major data point will be whether long-term holder spending patterns shift from loss to profit dominance, which would provide the strongest signal that the market has turned.

This article is for informational purposes only and does not constitute investment advice.