Bitcoin (BTC) held the $84,000 area into October 7 as an on-chain gauge of its supply returned a reading that runs counter to the narrative that the market is overheating, according to a calculation published that day by CryptoQuant analyst Darkfost.

Darkfost's reading showed that the share of Bitcoin's supply sitting in profit stood at roughly 60% once dormant coins were excluded from the count.

What the supply-in-profit gauge measures

The supply-in-profit indicator, tracked by on-chain analytics platforms such as CryptoQuant, estimates the proportion of all circulating bitcoin whose most recent on-chain move occurred at a price below the current spot price, meaning those coins are being held at an unrealized gain. Analysts follow the metric to assess how much of the network's supply sits in positive territory relative to prevailing market prices.

Because Bitcoin's public ledger records every transfer, each coin's cost basis can be reconstructed from on-chain data alone, and the gauge recalculates whenever spot prices move or coins change hands. That has made the profit share a recurring fixture of cycle analysis: selling at a gain can only originate from coins already in profit, so shifts in the reading are watched for clues about holder behavior rather than treated as a directional signal on their own.

Why dormant coins are excluded

Long-inactive coins are frequently stripped out of this type of calculation because bitcoin that has not moved for extended periods — often attributed to early participants, lost wallets, or long-term custody — can distort the picture of where currently active holders stand. Excluding dormant supply is intended to produce a reading that reflects the profit position of coins that still change hands on a regular basis.

At near 60%, Darkfost's calculation placed the profit share of the non-dormant supply at a level he argued does not support the view that the market is overheating. How that characterization holds up will be visible in the gauge itself: as prices move and coins change hands, each coin's last on-chain move price is re-compared against the prevailing spot level, keeping the metric continuously updated on how much of the actively circulating supply sits in unrealized gain.

This content was first published on COINOTAG: https://en.coinotag.com/bitcoin-supply-in-profit-near-60-percent-darkfost