The Convergence of Supply in Bitcoin Profit and Loss Signals Key Market Indicators

According to the latest data from Glassnode released in February 2026, the Bitcoin market is experiencing a significant convergence between profitable assets and those incurring losses. This convergence presents a technical outlook that warrants special attention, particularly for investors seeking to identify critical points in the market cycle. ChainCatcher reports that the gap between these metrics is narrowing, approaching levels that have historically coincided with market bottom formations.

Current Data: The Balance Between Profitable and Losing Wallets Is Approaching

Glassnode data reveal that approximately 11.1 million BTC are currently in profit, meaning accounts whose purchase cost remains below the current market price. Complementarily, around 8.9 million BTC are in loss, distributed among wallets whose entry costs exceed the current price. With a circulating supply of about 19.98 million BTC, these two sets of data represent a substantial portion of the total supply.

The narrowing of the gap between these figures defines the convergence that analysts point to. When the supply in profit and the supply in loss move closer to equilibrium, the indicator begins to approach ranges that have historically been relevant as precursors to cycle changes.

Convergence Signals: What Does It Mean for the Market Cycle?

This convergence is not merely academic. Historically, when market participants are divided almost equally between winners and losers, the system is often near a transition point. Analysts consider these phases as typical bottom formation moments, where selling pressure from capitulators is exhausted and long-term demand begins to accumulate.

The metric of Supply in Profit versus Supply in Loss acts as a thermometer of collective sentiment. When equilibrium is reached, it suggests there is no longer enough unrealized gains to incentivize further mass selling, nor enough losses to discourage strategic accumulation. This is precisely the condition characterizing extreme market capitulation phases.

Additional Factors to Evaluate the Technical Convergence

However, this convergence must be contextualized within the broader macroeconomic landscape. Analysts emphasize that bottom formation does not depend solely on this indicator. The structure of derivatives, liquidity flows, overall market sentiment, and institutional dynamics also play crucial roles in confirming or refuting whether we are truly at a cycle bottom.

If the supply in profit and loss continues to narrow toward a more pronounced convergence, it could strengthen the argument that the market is setting the conditions characteristic of a bottom formation phase. Nonetheless, this signal should be validated against other technical and fundamental indicators for a comprehensive and responsible assessment of long-term investment opportunities.