Bitcoin’s [BTC] latest recovery has improved investor profitability, though historical cycle data indicates the market has not yet crossed a decisive turning point.
Profitable supply increased from 46.2% on the 30th of June to 58% on the 21st of July. This was the lowest level in 2026. Over this time, more than 10% of the circulating supply went into realized profits as BTC bounced off the mid-$50,000s to the $60,000s.
However, at press time, the metric had retraced back to 55.2%.
Although previous recoveries in the bear markets were at least 64 percent, previous cycle highs occurred at approximately 69%, 64%, 83%, and 77%. Long-term holders are still accumulating, while short-term holders have continued to sell close to their cost basis with STH SOPR currently at 1.0.
This combination suggests that the selling pressure is easing. However, Bitcoin still needs profitability to move through the 60% to 65% range before matching the stronger recovery structure seen in previous cycles.
Whale profitability reinforces Bitcoin’s recovery
While overall profitability for Bitcoin still hasn’t reached levels experienced during prior recovery cycles, current whale trends suggest there is growing conviction below the surface.
As prices rebounded, investors were becoming profitable again after briefly falling into loss. Notably, holders of 100-1,000 BTC moved back into unrealized profit. That shift matters because investors who regain profitability often face a choice between realizing gains and continuing to hold.
Currently, the data appears to favor the latter. The largest groups of whales have remained profitable through the entire decline and only had minor drops in profitability. Thus, this shows that whales are avoiding significant distribution of coins at these times.
This pattern also mirrors March and April, when similar profitability recoveries preceded short-term advances. However, historically, whale profitability becomes more relevant if it coincides with continuous accumulation.
Therefore, the next phase depends less on whales returning to profit and more on whether they keep coins off exchanges instead of locking in gains.
Price action tests the recovery
The recent pullback has not invalidated Bitcoin’s improving on-chain backdrop. Instead, BTC has consolidated after rallying from the low-$62,000s to nearly $66,700, suggesting buyers still absorb supply from newly profitable holders.
Price continues to defend the $64,000 region, keeping the short-term structure intact. Meanwhile, RSI neared 51 as of writing, and the MACD flattened, indicating cooling momentum rather than strengthening selling pressure.
Losing $64,000 would weaken this outlook and increase the risk of deeper profit-taking before buyers attempt another move toward $66,700 resistance again.