Bitcoin volatility remains subdued as supply in profit nears historical bear-to-bull transition level: analysts

By James Hunt • Edited by Brian Danga
Markets•September 8, 2026, 8:08AM EDT
UPDATED: September 8, 2026, 8:23AM EDT
Bitcoin volatility remains subdued as supply in profit nears historical bear-to-bull transition level: analysts

Quick Take

  • Long-term holder supply explains more of the variation in bitcoin’s one-month realized volatility than market cap, open interest, funding rates, or trading activity, according to Glassnode.
  • More than 71% of bitcoin supply is now in profit, approaching a 74.7% historical mean that moves above have typically marked bear-to-bull transitions, Bitfinex analysts said.
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Bitcoin (BTC) volatility remains historically low, with long-term holder supply emerging as the strongest factor in explaining changes in one-month realized volatility, according to Glassnode.

Glassnode's analysis put long-term holder supply well ahead of the other factors it examined. Illiquid supply ranked second, with liveliness and absolute funding rates close behind. Market cap was much further down the list. "The strongest driver of low vol is not market cap. It is who holds the coins," the firm said.

Bitcoin is currently trading near $78,000 after briefly topping $82,000 at one point last week, with analysts at Bitfinex expecting that range to hold for now. "Our view on BTC remains constructive, but the conditions for a sustained advance have not yet been met," the analysts said. "Until then, the evidence supports continued consolidation with an upside bias, rather than a confirmed breakout."

Drivers of BTC volatility. Image: Glassnode.
Drivers of BTC volatility. Image: Glassnode.

Bitcoin supply in profit nears historical mean

More than 71% of bitcoin supply now sits in profit, according to the Bitfinex analysts. When bitcoin traded above $82,500 during its May consolidation, the figure was around 67%, they noted, while the short-term holder cost basis fell as low as $68,400 during the summer.

"Identical nominal price levels now trigger a greater volume of profitable coins, establishing a deeper pool of latent sell-side liquidity whenever the market tests previous local highs," the analysts said. "Supply in profit is also approaching its historical mean of 74.7%. A move above that mean has typically marked the transition from bear to bull markets."

Crypto market capitalization excluding bitcoin, ether, and stablecoins has increased by $51.2 billion since the beginning of September, moving above levels seen in mid-August, according to the analysts, adding that continued ETF inflows and stablecoin growth are also providing support. 

"The marker for this week is whether ETF inflows stay positive through the 9 September buyback and the 11 September CPI, even while the two-year holds above 4.34%," Bitfinex said. "A market that continues to buy even as the front end of the yield curve remains high, will be an indication that it no longer treats the policy rate as the binding constraint."