Bitcoin Holder Profits Now 121%: How Much Higher Can BTC Go?

Keshav Verma

7 months ago

2 mins read

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On-chain data shows the Bitcoin investors are now carrying 121% profits on average. Here’s whether this has been enough for a top in the past.

Bitcoin Profitability Index Is Currently Sitting Around 221%

In a new post on X, CryptoQuant author Axel Adler Jr has discussed about the latest trend in the Bitcoin Average Profitability Index. The “Average Profitability Index” is an indicator for BTC that compares the asset’s spot value with its realized price.

The “realized price” here refers to a measure of the cost basis or acquisition value of the average investor in the Bitcoin market. This metric’s value is determined using on-chain data, with the last price at which each coin in circulation was transacted on the blockchain being taken as its current cost basis.

When the Average Profitability Index is greater than 100%, it means the spot price of the cryptocurrency is currently higher than its realized price. Such a trend suggests the average investor is holding a net amount of profit.

On the other hand, the indicator being under this threshold implies the BTC market as a whole is carrying coins at a net unrealized loss. Naturally, the index being exactly equal to 100% indicates the holders as a whole are just breaking-even on their investment.

Now, here is a chart that shows the trend in the Bitcoin Average Profitability Index over the past decade:

As is visible in the above graph, the Bitcoin Average Profitability Index has registered a notable increase recently as the cryptocurrency’s run to the new all-time high (ATH) price has occurred.

The indicator has now reached a value of around 221%, which suggests the investors are in a significant amount of gains. More particularly, the BTC addresses as a whole are in a net profit of 121%.

Generally, the higher the profits of the holders get, the more likely they become to fall to the allure of profit-taking. The current Average Profitability Index level is high, but it’s uncertain if it’s high enough for a mass selloff to become a risk.

In the chart, the analyst has marked how high the metric went at the time of the tops of the previous bull runs. It would appear that 2017 peaked at 460%, while 2021 at 395%.

So far in the current cycle, the highest that the index has gone was 272%, which happened during the top back in March of this year. Given the fact that the indicator is yet to hit this level, let alone the peaks from the last cycles, it’s possible that Bitcoin still has sufficient room to run, before a top becomes probable.

BTC Price

At the time of writing, Bitcoin is trading around $76,200, up more than 9% over the past week.

Bitcoin Price Chart — The price of the coin seems to have been riding on bullish momentum recently | Source: BTCUSDT on TradingView

Featured image from Dall-E, CryptoQuant.com, chart from TradingView.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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