Bitcoin Price Enters Reset Zone as Profitability Falls to 60%

Key Insights:

• Bitcoin price entered the cycle reset zone as profitability dropped to 60.6%.
• ETF and corporate holdings reduced forced selling pressure across BTC price.
• Binance inflows dropped sharply, signaling weaker short-term Bitcoin price sell-offs.

Bitcoin price entered a historical reset zone on Thursday as profitability dropped across the network. Data showed only 60.6% of supply remained in profit, a level tied to past accumulation phases. The shift occurred as long-term holders retained gains while short-term selling slowed.

CryptoQuant data showed Bitcoin price profitability had earlier fallen to 50.8% on February 5. That marked the lowest level since January 2, 2023, placing a large share of holders near breakeven. Similar setups in past cycles have preceded extended upside moves, though the timing has remained uncertain.

The current structure reflected a different holder composition. Institutional demand and exchange-traded funds absorbed supply, which reduced reflexive selling pressure. That shift kept long-term profitability elevated even as broader network gains compressed.

Bitcoin Price Reacts as Supply Profitability Compresses

CryptoQuant records showed profitability remained within the 50–60% range over recent sessions. This band historically marked accumulation zones where unrealized gains stayed limited. Reduced gains lowered incentives to sell into short-term weakness.

Source: CryptoQuant

The move followed a pattern observed in earlier cycles when holders approached cost basis levels. At that stage, selling pressure typically eased because fewer participants held large profits. As a result, price stability often improved before directional expansion.

The long-term holder’s net unrealized profit and loss remained near 0.40 during the same period. This reading showed investors still held gains despite declining overall profitability. That divergence indicated a structural shift in how Bitcoin price reacted to drawdowns.

Bitcoin Price Structure Shifts with Institutional Holdings

CryptoQuant data indicated corporate entities and spot exchange-traded funds held 3,319,677 BTC. This share accounted for about 15.8% of the circulating supply and reflected growing institutional participation. These holders generally maintained longer investment horizons.

Bitcoin LTH-NUPL data | Source: CryptoQuant

This shift occurred because institutional capital often had lower volatility sensitivity. Unlike retail participants, these entities avoided reactive selling during short-term corrections. The result was reduced supply pressure during profitability compression phases.

The gap between falling network profitability and stable long-term holder gains highlighted this dynamic. Previous cycles in 2015, 2018, and 2022 showed deeper stress when long-term holders turned unprofitable. That condition has not appeared in the current structure.

Bitcoin Price Sell Pressure Drops as Exchange Flows Decline

CryptoQuant data showed short-term holder inflows to Binance dropped to 25,000 BTC on March 25. Analyst Darkfost said this level marked a new market low compared to earlier February activity. Lower inflows suggested reduced urgency among newer holders to exit positions.

Source: CryptoQuant

This decline followed heavier inflows near 100,000 BTC during the early February sell-off. At that time, reactive selling increased as market participants responded to volatility. The recent drop indicated that such behavior had cooled.

GugaOnChain noted that valuation models, such as market-to-realized-value ratios below 1, signaled deeper stress zones. Additional metrics included net unrealized profit and loss under -0.2 and a Puell Multiple near 0.35. These levels historically aligned with undervalued conditions.

While these indicators did not define exact bottoms, they outlined areas with limited downside risk. Combined with reduced exchange inflows, the data suggested selling pressure had moderated. This shift supported a more balanced market structure for Bitcoin price.

BTC price has now reached a critical phase where accumulation zones often precede expansion. The next near-term focus remained on whether profitability stabilized above current levels or declined further. Market participants monitored flows and valuation metrics for confirmation signals.

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