Definition. This chart presents an adjusted variant of Percent Supply in Profit, seeking to discount Inert Supply which has not moved in over 7 years. The model has two traces: 🔵 Percent Supply in Profit, which accounts for all coins in the supply, and 🟠 Adjusted Percent Supply in Profit, which discounts all coins older than 7yrs from the supply and assumes they are in profit. The inert supply volume is shown as faint blue columns, with price in black.

Technical. The two variants are computed as:

• Percent Supply in Profit = Supply in Profit / Circulating Supply x 100 🔵
• Adjusted Percent Supply in Profit = (Supply in Profit - Inert Supply) / Adjusted Supply x 100 🟠

where Inert Supply = Circulating Supply - Adjusted Supply (coins last active 7+ years ago). These metrics are presented as a percentage such that a reading of 26 indicates 26% of the relevant supply is in profit.

Interpretation. Given this very old supply was transacted at much cheaper prices, and is likely lost (and thus unlikely to transact), it produces a gradual upwards drift in metrics like Percent Supply in Profit — an ever-growing base of coins that are near-permanently in profit. The adjusted variant removes this drift, so its oscillations better reflect the profitability of supply that can realistically be spent: readings near saturation flag broadly profitable (and top-heavy) markets, while deep drawdowns in the adjusted series mark capitulation conditions among active holders.

Notes. This metric was first featured by Glassnode in The Week On-chain newsletter, Week 41 2022. Hint: a moving average/median can be applied to both variants by changing the moving average applied to the Supply in Profit = m3 input in the workbench. Built from Supply in Profit, Circulating Supply and Adjusted Supply. The companion NUPL adjustment is Adjusted-Net Unrealized Profit/Loss.