Bitcoin volatility is sitting at unusually low levels, while more than 71% of the total circulating supply is currently in profit. A threshold that Bitfinex analysts associate with the major bear-to-bull transitions observed across previous market cycles.

This apparent calm conceals an underlying tension: markets appear to be holding their breath ahead of a potentially decisive move. On-chain data is telling a story that price action has yet to reveal.

Here is a breakdown of the signals currently driving debate across the crypto analyst community.

71% of Supply in Profit: Why This Number Changes Everything

According to Bitfinex analysts, more than 71% of Bitcoin’s supply is currently held at an acquisition price below the current market rate. This level is far from trivial: historically, it corresponds to transition phases between a prolonged bear market and the beginning of a new structural bull cycle.

The metric in question is the Percent Supply in Profit, an on-chain indicator that measures the proportion of circulating supply whose last on-chain movement occurred at a price lower than the current price. When this ratio surpasses certain critical thresholds — typically in the 70% to 75% range — the market has historically entered an advanced accumulation phase, often preceding a significant price expansion.

This signal does not guarantee an immediate rally, but it does indicate that the market’s holding structure is consolidating. Weak hands have largely capitulated, and current holders display a healthy cost basis, which mechanically reduces potential selling pressure in the near term.

Volatility at the Floor: Compression Signal or Lack of Interest?

Alongside this on-chain signal, Bitcoin‘s realized volatility has contracted to particularly low levels. On derivatives markets, implied volatility indicators confirm this compression: traders are not pricing in any sharp short-term move, which is reflected in relatively subdued options premiums.

This type of setup — low volatility combined with a solid on-chain structure — is often described as a coil by technical traders. The market is building latent energy. Extended periods of compression frequently precede sharp directional breakouts, to the upside or the downside, even though the fundamental backdrop here leans toward the bullish scenario.

That said, some nuance is warranted: low volatility can also reflect a lack of immediate catalyst or liquidity fragmented across multiple venues. Without meaningful volume to confirm a direction, the compression signal remains incomplete. Traders are closely monitoring aggregated liquidity levels across major platforms to identify the next trigger.

What Previous Cycles Teach Us About This Type of Setup

Looking at historical data, phases where the Percent Supply in Profit crossed the 70% threshold following a bear market period generally coincided with the early weeks of a new market regime. This was notably observable during the transitions of 2019 and late 2020, two periods that preceded major price expansions.

The structural difference today lies in the macro and institutional context: the arrival of spot Bitcoin ETFs, growing institutional demand, and the recent halving are reshaping supply and demand dynamics compared to previous cycles. These factors could amplify — or accelerate — the market’s reaction if the critical threshold is definitively breached and confirmed by volume.

Analysts remain cautious on the precise timing, but the technical consensus points to a critical observation window in the weeks ahead. The convergence of on-chain data, volatility compression, and the macro backdrop creates a setup that very few market participants can afford to ignore.