Bitcoin’s On-Chain Profitability Has Surged With 97% of Supply Now in Profit: Glassnode

Bitcoin’s latest breakout is being fueled by institutions and steady on-chain demand rather than speculation, according to new data from Glassnode.

In the Oct. 8 edition of its "The Week On-chain" newsletter, the analytics firm said bitcoin’s surge to a new all-time high near $126,000 earlier this week was powered by strong ETF inflows and consistent accumulation from smaller market participants.

The move pushed bitcoin into fresh price discovery before consolidating near $122,500 on Wednesday.

ETF demand returns

Glassnode said more than $2.2 billion flowed into U.S. spot bitcoin ETFs within a single week, marking one of the strongest waves of institutional buying since April.

Those inflows reversed the mild redemptions seen in September and helped absorb much of the available supply on exchanges.

The firm noted that the fourth quarter has historically been bitcoin’s most favorable season, as professional investors often rebalance portfolios toward higher-risk assets such as crypto and small-cap stocks.

Sustained ETF demand, it added, could continue to anchor prices as year-end approaches.

Smaller holders drive accumulation

Glassnode’s on-chain data show that mid-tier holders, or wallets containing between 10 and 1,000 BTC, have been the main buyers behind the latest leg higher.

These accounts have apparently steadily increased their balances while larger whales have taken moderate profits, creating what the firm described as a “more organic accumulation phase.”

Nearly 97% of circulating supply is now in profit, a level that typically marks late-stage bull cycles but does not yet show signs of exhaustion.

The report highlighted the $117,000–$120,000 zone as a key area of on-chain support, with roughly 190,000 BTC last transacted there — a price range where new buyers may step in if markets pull back.

Leverage adds a note of caution

While Glassnode described market conditions as “robust but maturing,” it cautioned that futures open interest and funding rates have both risen sharply. It noted that annualized funding now exceeds 8%, suggesting a buildup of leveraged long positions that could heighten short-term fragility.

Even so, Glassnode argued that realized profits remain controlled compared with prior market tops, signaling that investors are rotating holdings rather than rushing to exit.

A structurally strong market

Overall, Glassnode said bitcoin’s structure remains sound, underpinned by institutional demand, deep liquidity, and broad-based accumulation.

The firm concluded that as long as ETF inflows persist, bitcoin’s rally could extend further into the fourth quarter, reinforcing its position as the most structurally supported uptrend in years.