BTC Supply Profitability Rebounds but Recovery Looms Uncertain
Vexoda Newsroom
Bitcoin’s supply profitability has improved, reaching 57.5%, but onchain data suggests a potential false recovery. Traders should remain cautious as the market's true bottom remains uncertain.
In July 2026, Bitcoin (BTC) saw an improvement in its supply profitability, with nearly 60% of BTC now worth more than their acquisition price, up from a low of around 46% just last month. However, onchain data analysis by CryptoQuant highlights that this recovery might be premature.
Onchain analytics platform CryptoQuant reported that the spent output profit ratio (SOPR) for long-term holders (LTHs), those who have held BTC dormant for at least six months, has improved but remains below critical levels. The 30-day simple moving average of LTH-SOPR is currently under 1 after previously exceeding it in April and May.
Historically, Bitcoin bear markets typically end when both supply profitability exceeds 64% and the 30-day SMA of LTH-SOPR stays above 1 for extended periods. In this cycle, these conditions were met briefly from April 28 to June 1 but subsequently rolled back over, indicating a potential false recovery.
While spot market demand has weakened, institutional interest in BTC remains robust. Despite these positive signs, Bitcoin ETFs experienced outflows of $225M, signaling caution among investors. Additionally, geopolitical tensions and rising oil prices could further impact the broader financial landscape.
The current situation underscores that while there are encouraging indicators like improved supply profitability, traders should remain vigilant. The market's true bottom remains uncertain, and a sustained recovery is yet to be confirmed. Key metrics such as LTH-SOPR will continue to guide whether this improvement marks a genuine shift or another false breakout.
Traders should monitor these critical onchain metrics closely, particularly the 30-day SMA of LTH-SOPR and total supply profitability. A sustained period above key thresholds could signal a more robust recovery in Bitcoin's market conditions.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.