Is Bitcoin quietly laying the groundwork for its next leg toward $120,000? Fresh on-chain signals show sellers losing steam while price stabilizes near $111,600 after a sharp pullback from the early-October ATH around $126,200. With the 30-day change in the percent supply in profit improving from roughly -12% to -6%, the negative momentum has eased — a setup that often precedes relief rallies when spot demand returns and liquidity is thin.

What the on-chain data is signaling

The percent supply in profit tracks how much of the circulating BTC would be profitable if sold now. A less negative 30D change means fewer holders are sitting on quick profits and fewer are motivated to sell into dips. In short: sell pressure is fading, the dip is being bought, and volatility compresses as weak hands exit. That’s the kind of backdrop in which a small influx of bids can move price disproportionately.

Why it matters now

BTC trades around $111,600 with 24h volume down roughly 20.9% to about $40.4B. Lower liquidity plus easing sell pressure can create a supply squeeze if fresh spot demand appears. But this cuts both ways: thin books also magnify downside if new liquidations hit. For traders, this is a timing game — wait for confirmation that buyers are absorbing supply rather than guessing bottoms.

Institutional tailwind: collateralized BTC

Reports that JPMorgan is evaluating allowing institutional clients to use BTC as loan collateral by end-2025 point to a growing institutional bid. It’s not an immediate catalyst, but it supports the medium-term thesis: more credit use-cases can deepen demand and reduce forced selling during stress.

Actionable takeaway

Watch for a break-and-hold above $112,000–$112,500 on rising spot volume. That would confirm buyers are absorbing supply as the on-chain profit metric improves, increasing the odds of a push toward $115,000 and potentially the $120,000 magnet.

How to trade the setup

• Track the 30D change in percent supply in profit: continuation toward 0% (or flipping positive) supports a trend reversal.
• Confirm with market microstructure: rising spot volume, neutral-to-negative funding, and stable/declining open interest suggest real demand over leverage.
• Key levels: $109,800 (intraday pivot), $111,850 (local high), $112,500 (break/hold trigger), $120,000 (psychological target), $126,200 (ATH resistance).
• Risk management: use modest size, avoid high leverage in thin liquidity, and set invalidation below recent swing lows (e.g., $108,000).
• Set alerts: 1h close above $112k with spot volume > your 7D average; if price loses $109k on rising volume, step aside and reassess.

Risks to respect

If the improving profit-supply trend stalls or reverses, or if funding turns strongly positive alongside surging OI (crowded longs), a squeeze can flip against late buyers. Macro headlines and liquidation cascades remain the wild cards. Let price confirm strength; don’t force trades into illiquid conditions.

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