In the ever-shifting landscape of Bitcoin’s fortunes, it appears the winds of profitability have once more taken a favorable turn, ascending from the depths of March’s despair to a more respectable 63%. Yet, one must not be too hasty in declaring victory, for the sagacious analyst, Mr. Axel Adler Jr., reminds us that the market’s behavior remains as fickle as a debutante at her first ball.
In his “Bitcoin Morning Brief” of May 19th, Mr. Adler observes a most curious dichotomy. The Bitcoin Percent Supply in Profit has indeed staged a recovery most commendable, yet the Short-Term Holder SOPR remains obstinately reticent, suggesting recent purchasers are still clutching their coins with a lack of conviction most unbecoming of a bullish market.
“The supply in profit has rebounded from its capitulation, yet short-term holders persist in their timidity, failing to realize sustained profits,” Mr. Adler remarked with a touch of exasperation. “There is, alas, no behavioral confirmation of a reversal-a most vexing state of affairs.”
Bitcoin Approaches a Precipice as Short-Term Holders Sound the Alarm
According to Mr. Adler’s meticulous data, the Bitcoin Percent Supply in Profit on a seven-day simple moving average has risen from a March low of 53.6% to 63.3% as of May 18th. This improvement signifies that a larger portion of the circulating Bitcoin now boasts an on-chain cost basis below the current market price-a marked advancement from the capitulation phase earlier this year.
However, Mr. Adler is quick to temper our enthusiasm, noting that this recovery remains incomplete by his exacting standards. The current reading lingers some 10 percentage points below January’s lofty heights of 72% and falls short of the historical cumulative average of approximately 76.9%. “This,” he declares, “leaves Bitcoin firmly in a recovery phase, rather than a state of full profitability.”
“The current level remains below the historical cumulative average of 76.9%,” Mr. Adler wrote with a sigh. “A return above 70%, coupled with steadfast price dynamics, would be the first signal of normalization in the supply structure-a prospect as elusive as a second dance with the most sought-after partner at Almack’s.”
The more precarious signal emanates from the short-term holders, whose STH-SOPR SMA-7D has recovered from a capitulation zone below 0.97 but has failed to maintain a position above the neutral 1.0 threshold. As of May 18th, the indicator stood at 0.9994, a hair’s breadth below neutral, with Bitcoin hovering near $76,900.
This is of no small consequence, for the STH-SOPR tracks whether coins moved by short-term holders-those held for less than 155 days-are sold at a profit or loss. A reading below 1.0 indicates that these holders are, on average, selling at a loss-a most unwelcome development. For Mr. Adler, this recent dip below the threshold is of greater import than the headline improvement in aggregate supply profitability.
“The STH-SOPR SMA-7D reached its cycle low in early February 2026 at 0.967, a zone of clear capitulation where short-term holders were realizing losses with abandon,” Mr. Adler recounted. “The subsequent recovery was as gradual as a courtship in a novel by Miss Austen herself.”
The indicator had stabilized in the 1.001 to 1.009 range in April as Bitcoin ascended above the $75,000 to $80,000 mark. However, the pullback to 0.9994 marked the first descent below 1.0 after approximately two weeks above the threshold-a warning that the recovery remains precariously dependent on price maintaining a narrow support band.
“The key question now is whether STH-SOPR can once more hold above 1.0 or continue its decline in tandem with price,” Mr. Adler mused. “Should the 1.0 level be lost with the price falling below $76,000, the risk of retesting the March lows in Supply in Profit would increase most alarmingly.”
For the present, Mr. Adler characterizes the market stance as neutral with a cautious bias. The critical zone lies between $76,000 and $77,000, which, if defended by buyers, could propel STH-SOPR back above 1.0. A stronger confirmation would require STH-SOPR to remain above 1.0 for five to seven trading days while Bitcoin holds above $78,000 to $80,000, alongside Supply in Profit advancing toward the 68% to 70% range.
The downside scenario, alas, is more immediate. Mr. Adler flags a potential pullback to $73,000 to $74,000 as the principal risk, a move that could drag STH-SOPR back into the 0.98 to 0.99 zone and stall the improvement in Supply in Profit.
At the time of this report, BTC traded at $77,015-a figure as uncertain as the affections of a certain Mr. Darcy.
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2026-05-20 06:27