Nearly 70 percent of Bitcoin's supply is back in profit after the asset's week-long surge from $62,000 to $80,000, yet $617 billion of invested capital remains underwater.
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Bitcoin's 69% supply in profit masks $617B still underwater
Bitcoin's rally from $62,000 to $80,000 pushed 69 percent of supply into profit, per CryptoQuant, while $617 billion of invested capital stays at a loss.
"In-line is not the same as harmless. A core print at consensus leaves the existing policy debate largely intact and settles little," said Ryan Lee, chief analyst at Bitget Research, after July PCE inflation held at 3.7 percent headline and 3.3 percent core on Aug. 26.
The supply-in-profit reading reflects a rally that began after Treasury Secretary Scott Bessent announced expanded Treasury bond buybacks, pushing yields and the dollar lower and reviving the debasement trade. Bitcoin gained 23.6 percent in its second-strongest weekly performance since early 2021. Yet the metric's bullish signal is tempered: $617 billion of the total capital representing Bitcoin supply, worth over $1 trillion, is still at a loss, according to CryptoQuant. The high profit share is partly fueled by tokens dormant for years, some of which will remain untouched.
The next test arrives Friday when roughly 81,700 Bitcoin options worth $6.44 billion expire on Deribit at 08:00 UTC, coinciding with Fed Chair Kevin Warsh's Jackson Hole keynote. Glassnode's confirmation level for a genuine breakout is a settled close above $83,300, with the $81,000 to $86,000 band serving as the main resistance zone. On the downside, the short-term-holder cost basis sits near $70,000.
ETF inflows underpin the rally
US-traded spot Bitcoin ETFs absorbed $2.23 billion around Bitcoin's initial squeeze, with no single outflow day and the strongest seven-day intake of 2026, according to Glassnode. Farside Investors' daily tracker shows another $314.3 million of inflows on Aug. 25, led by $284.4 million into BlackRock's IBIT, extending the positive run from Aug. 17 through Aug. 25 to roughly $2.6 billion. Aug. 26 added $232 million, marking an eighth straight inflow session.
Every wallet-size cohort was accumulating simultaneously, from small holders to the largest addresses. Aug. 19 produced the largest dollar-denominated single-day short liquidation event in Glassnode's dataset since 2019, with roughly 85 percent of liquidations across that window coming from short positions. Futures open interest fell 11 percent in BTC terms through the move, while funding stayed close to neutral, suggesting new speculative longs did not replace liquidated shorts.
Overbought signals and the $81,000 wall
Bitcoin trades at $80,526, up 1.9 percent on the day after tagging an intraday high of $80,808, with 24-hour volume at $30.87 billion and a market cap of $1.60 trillion. The 50-week moving average near $81,085 capped the rally on Tuesday, and the Relative Strength Index sits at 82.4, well into overbought territory, a zone that has repeatedly capped upside in this same rally. Coinglass logged $409.07 million in liquidations over the past day, including $280.05 million in shorts, with $106 million in ETH shorts and $78.88 million in BTC shorts wiped off the tape.
The macro backdrop remains constructive. Total stablecoin market capitalization sits near $303.7 billion, up $2.8 billion over the past week, while NYDIG data shows stablecoin supply rose $1.25 billion during the rally, mostly from USDC. Sygnum Bank CIO Fabian Dory called the combination of in-line PCE, strong service-led PMI data, and a weak payroll month "gradual disinflation rather than a demand shock," adding that the mistake is reading a quiet print as a quiet backdrop.
The bull case has Bitcoin closing settled sessions above $83,300 while ETF inflows keep arriving and funding stays contained, opening the door to $95,000 to $100,000 as stretch targets. The bear case has wallet-cohort accumulation losing breadth and ETF flows flipping toward outflows, pulling Bitcoin below its $70,000 short-term-holder cost basis, with the $62,000 to $65,000 floor as the next real test.
This article is for informational purposes only and does not constitute investment advice.
