The share of STH supply in profit provides a clear lens into this dynamic. During the leg lower to $107,370 - a 13.61 percent decline from our ATH of $123,640 STH supply in profit collapsed from above 90 percent. For all corrections this cycle, this has been a standard cooling from an overheated state since a large portion of the STHs has been ETFs and BTC treasury companies who have been buying in a price-agnostic manner. Such reversals typically trigger fear-driven selling from other recent buyers, and futures and options market participants. What then typically follows is exhaustion from the same cohort, resulting in a rebound. This phenomenon underpinned the rebound from $108,000 back to $112,000 last week.
Figure 2. Short-Term Holder Supply In Profit. Source: Glassnode)
While more than 58 percent of STH supply is back in profit, this recovery remains fragile. A sustained move above the $114,000$116,000 zone, where more than 75 percent of STH supply would be in profit, is likely to instil the confidence needed to attract fresh demand and ignite the next leg higher. Beyond these on-chain metrics, spot ETF flows also provide one of the clearest measures of institutional demand from traditional finance TradFi, making them a critical gauge of off-chain sentiment. What do ETF flows tell us? The 14-day average of net inflows into both BTC and Ether ETFs highlights the decisive role these products have played in recent price action.