tl;dr
Bitcoin's price rally has pushed 97% of its supply into profit, but analysts warn of rising leverage and crowded positions that could trigger short-term volatility. While institutional demand and key support levels offer stability, the market faces risks as it approaches critical price thresholds.
**Bitcoin's Near-All-Time Profitability Raises Concerns Over Short-Term Fragility, Analysts Warn**
Bitcoin’s price surge has pushed nearly all of its supply into profit, but rising leverage and crowded trading positions could signal growing vulnerabilities, according to onchain analytics firm Glassnode. As of Wednesday, 97% of Bitcoin’s (BTC) circulating supply is trading above its acquisition cost, marking a significant milestone as the asset approaches a new all-time high.
**A Healthy Bull Market or a Fragile Rally?**
Glassnode highlighted that the recent rally has lifted most holders out of the red, with the majority of BTC supply now in profit. The analytics provider noted that elevated profit levels often precede market consolidation, but current data suggests an “orderly rotation” rather than panic selling. “Investors have been gradually taking profits and reallocating holdings, which is typical of a healthy bull market where profit-taking is balanced by fresh demand,” analysts explained.
However, the report also warns of potential risks. Rising leverage in the market and “crowded call positioning”—a term referring to excessive long bets—could introduce short-term fragility. This dynamic, combined with the concentration of supply at higher price levels, may lead to volatility as traders adjust their positions.
**Key Support Zone: $117,000**
Glassnode’s “Cost Basis Distribution Heatmap” identified structural support between $121,000 and $120,000, with stronger resistance near $117,000. This level, where approximately 190,000 BTC were last acquired, is seen as a critical area for potential stabilization. Analysts suggested that a pullback to this zone could attract renewed demand as recent buyers defend their profitable entry points. “A potential pullback into this region could invite renewed demand, signaling stabilization and a resurgence of momentum,” the report stated.
**Institutional Demand Surges, But Leverage Risks Loom**
Despite the risks, Bitcoin’s futures and spot ETF markets have seen strong institutional participation. Spot Bitcoin ETFs in the U.S. recorded over $2.5 billion in inflows this week, including their second-highest inflow day in the first three days of the week, per CoinGlass. However, rising leverage and funding rates in futures markets could amplify short-term volatility.
Glassnode concluded that Bitcoin’s current uptrend remains “robust yet maturing,” supported by strong demand but increasingly sensitive to profit-taking and leverage resets as the asset navigates price discovery.
**Price Action and Market Sentiment**
Following a late Wednesday high of $124,000, Bitcoin retreated slightly to just below $122,000 at the time of writing. While the broader narrative points to a resilient bull market, the interplay between profit-taking, leverage, and key support levels will likely shape the next phase of Bitcoin’s journey.
As investors and analysts closely monitor these dynamics, the coming days may determine whether Bitcoin’s ascent continues or faces a correction amid evolving market conditions.