Bitcoin (BTC) investors have returned to aggregate profitability, but onchain data suggests it is premature to declare the start of a new bull market.

According to onchain analytics platform CryptoQuant, Bitcoin supply in profit rebounded above the 50% threshold in July, continuing an upward trend from a recent trough. The metric, which tracks the share of Bitcoin circulating supply worth more than its acquisition price, reached 57.5% as of July 22 — a significant rise from 46.2% on June 30, the 2026 low.

CryptoQuant contributor thechessONCHAIN noted that the improvement, while notable, has not yet met the criteria historically required to confirm the end of a bear market. The distinction matters because supply profitability can improve during relief rallies without necessarily showing that long-term holders have stopped realizing losses onchain.

Metrics Must Clear Specific Hurdles

With nearly 60% of the BTC supply now in profit, the spent output profit ratio (SOPR) of long-term holders (LTHs) is also showing signs of recovery. LTHs are defined as entities whose Bitcoin has remained dormant for at least six months. SOPR measures the proportion of LTH coins moving onchain at a price higher than their previous transaction value. Readings above 1 indicate that coins are predominantly moving in profit, while readings below 1 suggest LTH investors are realizing losses — behavior often associated with capitulatory activity.

ThechessONCHAIN explained that in previous cycles, bear markets have only been confirmed over once both supply in profit and LTH-SOPR satisfy specific conditions simultaneously: the 30-day simple moving average (SMA) of LTH-SOPR must remain above 1 without dipping below that level for extended periods, and total supply in profit must exceed 64%.

"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," TheChessOnChain observed. Since that reversal, the 30-day SMA of LTH-SOPR has remained below 1 for more than 50 consecutive days.

Recovery Outlook Remains Fragile

As Cointelegraph previously reported, Bitcoin supply in loss crossed the 50% mark in June — a threshold that has historically preceded bear-market bottoms. The current data mirrors patterns seen in prior Bitcoin bear markets, where the 50% loss mark served as a signal that a price cycle bottom was approaching.

For traders and analysts using onchain data, the next confirmation point is not simply whether more coins move back into profit, but whether profitability broadens while LTH-SOPR holds above breakeven for a sustained period. Until those conditions align, the recovery remains vulnerable to another setback in realized onchain profitability.

On the demand side, signals remain mixed. Weak spot-market interest continues to contrast with a renewed rebound in institutional BTC allocation, leaving the broader recovery picture uncertain.