Bitcoin’s [BTC] latest rebound has lifted investor profitability, but historical cycle data indicates that the market has not yet reached a decisive recovery threshold.

The share of Bitcoin supply in profit rose from 46.2% on June 30 to 58% on July 21, after touching its lowest level of 2026. During that period, more than 10% of circulating supply moved back into realized profit as BTC recovered from the mid-$50,000s into the $60,000 range.

At press time, however, the metric had pulled back to 55.2%. Supply in profit tracks the portion of coins whose current price is above their last moved on-chain price, making it a useful gauge of how much of the market is sitting on unrealized gains.

The current level remains below the profitability readings seen during earlier bear-market recoveries. Previous recovery phases reached at least 64%, while prior cycle highs were recorded at approximately 69%, 64%, 83%, and 77%.

Long-term holders are still accumulating, while short-term holders have continued selling close to their cost basis. The short-term holder spent output profit ratio, or STH SOPR, is currently at 1.0. A reading near 1.0 indicates that short-term holders are, on average, spending coins around breakeven rather than at a large profit or loss.

Together, these conditions suggest that selling pressure is easing. Even so, Bitcoin’s profitable supply would still need to move through the 60% to 65% range before its structure resembles the stronger recovery patterns seen in previous cycles.

Whale profitability supports the recovery backdrop

Although Bitcoin’s overall profitability has not yet returned to levels associated with earlier recovery cycles, current whale trends indicate strengthening conviction beneath the surface.

As prices rebounded, more investors returned to profit after briefly falling into loss. Holders with 100 to 1,000 BTC moved back into unrealized profit, a notable shift because investors who regain profitability must decide whether to realize gains or continue holding.

For now, the data appears to point toward continued holding. The largest whale groups remained profitable throughout the decline and saw only minor reductions in profitability. That behavior indicates that whales are avoiding significant coin distribution at current levels.

A similar pattern appeared in March and April, when profitability recoveries among whales preceded short-term advances. Historically, however, whale profitability becomes more important when it is paired with sustained accumulation.

As a result, the next phase depends less on whales returning to profit and more on whether they continue keeping coins off exchanges instead of locking in gains. Exchange-related flows remain important because large transfers to trading venues can signal potential supply coming to market, while continued holding can reduce immediate sell-side pressure.

Price action remains a key test

Bitcoin’s recent pullback has not invalidated its improving on-chain backdrop. Instead, BTC has consolidated after rallying from the low-$62,000 area to nearly $66,700, suggesting that buyers continue to absorb supply from holders who have recently moved back into profit.

The price has continued to defend the $64,000 region, keeping the short-term structure intact. At the time of writing, the relative strength index, or RSI, was near 51, while the MACD had flattened. Those indicators point to cooling momentum rather than strengthening selling pressure.

A loss of the $64,000 level would weaken that setup and increase the risk of deeper profit-taking before buyers attempt another move toward resistance near $66,700.

Bitcoin profitability is improving, but it remains below the historical levels that confirmed previous bull-market recoveries. BTC whale holding patterns and resilient price action continue to support the recovery backdrop, while $64,000 remains the key near-term level to watch.