Bitcoin BTC +0.20% broke through the $44,000 mark for the first time in more than a week on Wednesday, rising by 4% over the past 24 hours. Coinglass data shows the break-out caused over $33 million in BTC short liquidations in the past 24 hours.

However, according to analysts, the largest digital asset by market cap could experience increased sell pressure because a super majority of circulating supply is now in profit.

"As the market rallies, a super-majority of investor coins have returned to being in-profit," Coinglass analysts said in the new report.

Bitcoin has broken through the $44,000 mark, according to The Block's Prices Page.

Coins held 'in-loss'

The Coinglass analysis pointed to data that showed how the total volume of coins held "in-loss" has declined to around 1.9 million bitcoin, with most held by long-term holders who bought near the 2021 highs.

The data from Coinglass concurs with that from The Block's Data Dashboard which shows that the percentage of bitcoin circulating supply that is in profit is now over 88%. That's a high not seen since late November 2021.

"2023 started out with over 50% of bitcoin supply being underwater, this is one of the fastest recoveries in history, second to the rally in 2019," Coinglass said.

A Coinglass chart showing the total amount of bitcoin supply in loss.

Sell pressure

A recent CryptoQuant report also suggested sell pressure is increasing for the digital asset.

"In the short-term, there are some risks of a price correction given that short term bitcoin holders are experiencing high unrealized profit margins, which historically has preceded price corrections," the report said.

However, the report highlighted longer-term bullish indicators for 2024.

"On-chain valuation and network metrics signal bitcoin remains well inside a bull market and may be targeting $54,000 in the medium term and $160,000 plus as this cycle price top," the CryptoQuant report added.