Bitcoin Supply in Profit Nears Bear Market Lows

Bitcoin's on-chain structure is deteriorating in ways that matter directly to perpetual futures traders. The share of BTC supply held in profit has collapsed to approximately 59% — a figure that aligns closely with readings observed during the previous bear market cycle and sits well below the long-run historical average of roughly 75%. With price briefly reclaiming $72,000 before stalling, the underlying market dynamics remain structurally weak, and derivatives positioning is beginning to reflect that reality.

What Does 59% Supply in Profit Mean for Perp Markets?

When the proportion of BTC supply in profit compresses this aggressively, it reshapes the behavioral landscape for market participants. CryptoQuant analyst Darkfost flagged that as of this week, nearly 1 in 2 BTC is held at a loss or at breakeven — a condition that historically reduces sell-side pressure but simultaneously signals eroding conviction across the holder base.

The critical threshold to monitor is 50% supply in profit. Bear market cycle bottoms have historically clustered around this level. A breach below it would represent a structural shift — one likely to trigger cascading stop-losses and forced liquidations across leveraged long positions in perpetual markets. Conversely, extreme loss levels have historically preceded accumulation phases, offering asymmetric setups for traders willing to position ahead of capitulation exhaustion.

Compounding the bearish on-chain read, the BTC Market Value to Realized Value (MVRV) Z-Score has yet to enter its historically defined green bottoming zone. At least one analyst has projected an additional 6 months of bear market conditions, with the $60,000 level dismissed as a credible cycle bottom. If accurate, the path of least resistance for BTC perps remains to the downside, with elevated risk of long liquidation cascades at key support clusters.

What Blackperp's Engine Shows

Blackperp's live engine on BTCUSDT ($72,899.9) is registering a lean short bias at 63% confidence within a ranging regime and medium volatility environment — a setup that warrants caution for both directional longs and aggressive short entries.

The most pressing signal is the liquidation cluster map: 841 identified clusters with long liquidation exposure totaling $20.23B against just $7.48B in short liquidations, producing a net delta of $12.76B skewed toward long flush risk. This imbalance is significant — any sustained move lower from current levels would mechanically accelerate selling as overleveraged longs get cleared out.

Funding dynamics add a layer of nuance. The annualized funding rate is currently sitting at -791.14% with a basis of -4.3bps, indicating an aggressively crowded short side in perpetuals. The mean reversion Z-score has reached 2.93 — an extreme stretch — with a fade signal active. This creates a tension: the structural trend is bearish per on-chain data, but the derivatives positioning is so short-heavy that a violent squeeze toward the upside cannot be ruled out before any continuation lower.

Key downside support levels identified by the engine sit at $70,320, $70,268, and $69,523 — all dense with long liquidation clusters that could act as magnet zones if price breaks below current consolidation.

On SOL ($84.52), the engine flags a contrasting funding picture: annualized positive funding at +474.13% with $1.87B in long liquidations clustered above, suggesting crowded longs and mean reversion risk to the downside. SOL is also printing as a relative strength laggard versus BTC at -0.885x. NEAR ($1.345) shows extreme negative funding at -2,178.94% annualized with downward liquidation gravity — the engine's liq gravity score reads 0.71 toward the downside, with a dense long liquidation cluster sitting just below current price near $1.22.