Bitcoin’s profitability mirrors the previous market bottom of 50%
Bitcoin's (BTC) total margin stands at 60.6% on Thursday, continuing to move within a range historically associated with market cycle resets. The measure previously fell to 50.8% on Feb. 5, the lowest level since Jan. 2, 2023, leaving a large share of holders in ruins or at a loss.
Similar conditions have preceded strong upward movements in previous cycles. In the year In January 2023, BTC traded at $16,682, a 51% gain, before rising 655% to $126,000 in 2025.
A similar event occurred in March 2020 when BTC traded at $6,500 before moving to $69,000 in 2021, when the total supply fell below 50%.
Bitcoin profitability will return to the basic levels of the previous market cycle
Over the past five years, there have been frequent periods where the 50-60% profit range has been set based on the cost of BTC from multiple holders. That attacks unsecured gains on the network and reduces the incentive to sell into weakness.
It should be noted that the measure does not indicate the bottom of the price. It outlines the zone where long-term accumulation has yielded the highest profits and the lowest selling pressure is reduced.
In past cycles, Bitcoin price plateaus have formed when the Long-Term Owner's Net Unexpected Profit/Loss (LTH-NUPL) has turned negative, as seen during the bear markets of 2015, 2018 and 2022. This phase marks the period when long-term investors were caught in losses.
However, the current LTH-NUPL reading is close to 0.40, which means that even if overall supply profitability has declined at the lows of the market cycle, long-term holders are still comfortably in the profit.
This gap reflects the changes in the market environment. A growing share of Bitcoin supply is held by institutional entities and exchange-traded funds (ETFs), which collectively control 15.8% of the circulating supply, or 3,319,677 BTC.
These participants often operate with longer holding periods and lower sensitivity to short-term price fluctuations.
As a result, the squeeze on profitability in the BTC market will not translate into the level of forced selling by long-term holders seen in previous cycles in 2015, 2018 and 2022.
This change helps explain why the total dividend supply tends to visit historical accumulation zones where long-term shareholder profitability remains high.
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BTC exchange flows are consistent with valuation models
The short-term BTC flow to Binance fell to 25,000 BTC on March 25. Crypto analyst Darkfost said the market was at a low of roughly 100,000 BTC in early February. This decline reflects a clear reduction in active sales from new market entrants.
Meanwhile, crypto analyst GugaOnChain's valuation models help to identify where the deep market stress for BTC will occur. Metrics such as market-value-to-realized-value (MVRV) below 1, NUPL below -0.2 and pool multiple near 0.35 have historically been seen as undervalued during periods of heavy retail pressure.
While these indicators cannot predict actual market bottoms, they highlight zones where downside risk has historically been limited relative to long-term uptrends, providing a clear view of the overall market position.
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