Bitcoin holders are seeing a broad return to unrealized profitability, according to on-chain analytics, but the same data set also highlights a familiar risk: the market may be setting up for another aborted recovery before a sustained bull phase can be confirmed.

CryptoQuant, a widely used on-chain analytics platform whose metrics are frequently cited by traders and analysts, provides data that platform contributor thechessONCHAIN says shows the share of Bitcoin's circulating supply currently trading above its approximate acquisition price—a metric known as Supply in Profit—has climbed to 57.5% as of July 22. That figure stands against 46.2% recorded on June 30, which CryptoQuant uses as its reference point for a 2026 low. While the rebound is notable, CryptoQuant's framework cautions that a single metric improvement does not, on its own, constitute confirmed recovery.

Supply in Profit rebounds toward 60%

On-chain analytics platforms infer investor cost basis by examining the conditions under which coins were last active on-chain—an approach unique to cryptocurrency markets, where every transaction is permanently recorded on a public ledger. CryptoQuant's Supply in Profit (%) specifically measures the portion of the total Bitcoin supply that is worth more than the price at which it was last moved. When that percentage increases, it generally signals that a larger share of the supply is being held at unrealized gains.

According to CryptoQuant, the metric crossed back above the 50% threshold in July. ThechessONCHAIN identified the move to 57.5% by July 22, up from the 46.2% low on June 30. The pace of the rebound is itself notable: climbing from the mid-40s to the upper-50s in less than a month indicates a sharp repricing across the market.

CryptoQuant's contributor emphasizes, however, that a sustained bull-market recovery typically requires these gains to hold—particularly when assessed alongside long-term holder behavior.

Long-term holder SOPR remains the key gatekeeper

As Supply in Profit improves, CryptoQuant also monitors related indicators tied to realized selling pressure. One of the most important is long-term holder SOPR, or Spent Output Profit Ratio (LTH-SOPR), which compares the sale price of long-dormant coins to the price at which they were last transacted.

Under CryptoQuant's definitions, long-term holders are entities whose Bitcoin has remained unmoved for at least 157 days (approximately six months). SOPR readings above 1 indicate that long-term holder coins are generally being spent at prices higher than their prior transaction value, while readings below 1 suggest those coins are moving at a loss.

CryptoQuant contends that in previous cycles, bear markets have not fully concluded unless two conditions simultaneously hold:

• The 30-day simple moving average (SMA) of LTH-SOPR remains above 1.
• Total Supply in Profit stays above 64%.

This dual requirement matters because Supply in Profit can rise simply as market prices recover, but that alone does not guarantee that long-term holders are structurally comfortable spending into strength. If LTH-SOPR stalls or slips back below 1, it may indicate persistent caution or recurring distribution from older coin holdings.

History of a prior failed attempt

CryptoQuant's analysis includes a warning grounded in the current cycle's own recent history: the market has already produced one rebound that appeared convincing at the time, only to reverse.

As described by thechessONCHAIN, from April 28 to June 1, the 30-day SMA of LTH-SOPR held above 1.0 for approximately 35 days, while Supply in Profit reached 67%. Both metrics ultimately rolled back, meaning the improvement did not persist long enough to qualify as a confirmed cycle transition.

Since that reversal, CryptoQuant notes that the 30-day SMA of LTH-SOPR has remained below 1 for more than 50 consecutive days. This detail is significant because it indicates the recent Supply in Profit rebound has not yet been accompanied by the level of long-term holder spending profitability that CryptoQuant's framework requires for a validated recovery.

The implication is not that the market is necessarily bearish, but rather that on-chain evidence remains incomplete. A rise toward 60% in Supply in Profit can lay the groundwork for healthier conditions, yet CryptoQuant's criteria suggest that interpreting this move as confirmation of a sustained bull phase would be premature.

Broader market signals: bottom timing vs. demand uncertainty

Earlier coverage from Cointelegraph noted that Bitcoin supply in loss crossing certain thresholds has historically been used to estimate where bear-market bottoms may be forming. That perspective aligns with CryptoQuant's rationale for tracking profitability metrics: transitions from supply in loss to supply in profit have tended to coincide with turning-point behavior in prior cycles.

Cointelegraph described how the supply-in-loss threshold historically preceded a countdown toward cycle bottoms. While that pattern does not guarantee a repeat in the current cycle, it helps explain why the upward move in Supply in Profit is attracting analyst attention.

Demand signals, however, remain mixed. Cointelegraph previously reported weak spot-market interest in the near term, set against a rebound in institutional activity through Bitcoin exchange-traded products. In particular, Cointelegraph referenced soft spot-market demand alongside improving institutional BTC allocation, as Bitcoin ETF flows had briefly entered a short-term inflow streak before recording outflows.

This asymmetry is relevant: even when profitability metrics improve rapidly, insufficient fresh demand can render breakouts fragile. Conversely, if institutional allocation continues while LTH-SOPR stabilizes above 1, that combination could prove more supportive of a durable recovery.

What to watch next

CryptoQuant's framework indicates that the next key checkpoint is whether LTH-SOPR can regain and sustain momentum—specifically, whether its 30-day SMA pushes back above 1 and whether Supply in Profit can move beyond and hold above 64%. Until both conditions are met simultaneously, Bitcoin's return to aggregate profitability is best viewed as a promising development that still requires on-chain confirmation.