Bitcoin's price has shed 12.5% over the past week, knocking the share of coins held in profit down to roughly 55% — a level that still sits higher than the sub-50% troughs of past bear cycles. CryptoQuant founder Ki Young Ju called the current market structure a 'distribution phase' marked by a massive change of hands, as institutional buyers and Michael Saylor's Strategy (MSTR) continue to absorb supply even as prices stagnate.
Supply in profit nears bear territory
The on-chain metric, which tracks the percentage of Bitcoin supply with an acquisition cost below the current price, fell to about 55% this week. In the previous bear market cycles, that figure dropped below 50% before a lasting bottom formed. For context, it hit 53% in February of last year.
CryptoQuant analyst Darkfost expects the marker to breach the 50% threshold sooner than many anticipate. That would align with historical patterns where most investors give up hope just before a real recovery begins — but the facts so far don't guarantee a replay of past cycles.
Realized price and the $53,000 question
The average cost basis of all Bitcoin holders now sits around $53,000. In prior downturns, Bitcoin ended its bear market only after the spot price fell below that realized price — effectively meaning the average bag holder was underwater. Ki Young Ju argued it is hard to revisit that level this time, citing sustained institutional inflows and MSTR's almost-locked hands.
Since January 2023, MSTR has bought 711,206 coins and sold just 32 — essentially removing 711,174 BTC from circulating supply. Exchange reserves, now holding about 2.7 million BTC, have seen nearly half of that absorbed by buyers since early 2023, yet the price hasn't budged.
Accumulation that went nowhere
Combined ETF and MSTR purchases have removed more than 1.24 million BTC from the market. During March of last year, while Bitcoin traded around $63,000, ETFs absorbed 509,102 coins and MSTR bought another 650,706. Net effect: price returned to the same $63,000 level after those purchases — a stark illustration of supply absorption without upward impact.
That anomaly is at the heart of the current story. Ki Young Ju's 'distribution phase' label captures the idea that coins are moving from weak-handed sellers to institutions and long-term holders, but the volume of new supply hitting the market has matched the demand, keeping a lid on price gains. The question now is whether that relationship can shift — and what happens if the correction pushes the supply in profit below the 50% line.
