97% of Bitcoin Addresses Turn Profitable as Network Hits All-Time High in Active Wallets

The Bitcoin blockchain is flashing historically bullish signals as on-chain metrics paint a picture of overwhelming investor profitability and unprecedented network growth. As Bitcoin surged past the $62,000 mark in early March 2024, data from leading blockchain analytics firms reveals that the network is experiencing levels of activity and profitability not seen since the peak of the previous bull cycle.

TL;DR

• Over 97% of all Bitcoin on-chain addresses were in profit as BTC reached approximately $64,000
• Bitcoin network recorded an all-time high of 1,265,155,176 addresses as of March 2, 2024
• More than $1.7 billion in BTC and ETH was withdrawn from centralized exchanges in a single week
• Bitcoin accumulation addresses received record-high inflows, signaling strong holder conviction
• Analysts warn that some indicators are flashing overheating signals, with potential 20-25% correction ahead

Near-Universal Profitability Across the Network

According to data from IntoTheBlock, over 97% of Bitcoin on-chain addresses reached profitability as the cryptocurrency pushed to a local high near $64,000. This represents the highest proportion of profitable addresses since November 2021, when Bitcoin was trading around $69,000 and approaching its all-time high. The metric is particularly significant because it indicates that the vast majority of Bitcoin holders — regardless of when they purchased — are currently sitting on unrealized gains.

The IntoTheBlock On-Chain Insights report on Bitcoin Dynamics Supply versus Demand highlighted the extraordinary nature of this profitability level. When such a high percentage of addresses are in profit, it historically signals that the market is in an advanced stage of a bull cycle, though it does not necessarily mean a top has been reached.

Network Growth Reaches Unprecedented Scale

Glassnode data revealed that the Bitcoin network surpassed a remarkable milestone on March 2, 2024, with 1,265,155,176 total addresses on the network — an all-time high. This metric reflects the cumulative growth of the Bitcoin ecosystem and suggests that adoption continues to accelerate even as the price climbs. The expanding address count indicates that new participants are entering the network alongside existing users increasing their activity.

The growth in network participation was accompanied by a significant increase in transaction fees. Bitcoin transaction fees rose by 20.86% and Ethereum fees surged by 43.56% in the days leading up to March 2, reflecting heightened on-chain activity across both major blockchains. This fee pressure is a natural consequence of increased demand for block space, particularly as inscription-related activities push Bitcoin block sizes to near their technical limits.

Record Accumulation and Exchange Outflows

Julio Moreno, Head of Research at CryptoQuant, reported that Bitcoin inflows into accumulation addresses — defined as addresses that only receive Bitcoin and never spend — reached an all-time high. This metric is considered one of the strongest signals of long-term holder conviction, as it indicates that investors are actively acquiring and holding Bitcoin rather than trading it.

Meanwhile, on-chain data shows that over $1.7 billion worth of Bitcoin and Ethereum was withdrawn from centralized exchanges during the week ending March 2. Large-scale exchange outflows are traditionally interpreted as a bullish signal, suggesting that investors are moving assets to cold storage for long-term holding rather than keeping them on exchanges for potential sale.

Block Size Records and Inscription Activity

The Bitcoin blockchain also witnessed a notable technical milestone when Marathon Digital mined a block measuring 3.99 megabytes on March 2, 2024 — just shy of the theoretical 4 MB maximum. This near-maximum block size was driven by inscription-related activities, which have emerged as a significant source of demand for Bitcoin block space. The increasing block sizes reflect the evolving use cases of the Bitcoin network beyond simple value transfers.

Long-Term Holders Signal Mixed Sentiment

Despite the overwhelmingly positive metrics, some cautionary signals are emerging. Approximately 13.6 million BTC, representing over 69% of the available supply, is held by long-term investors who have not moved their assets for at least one year. While this HODLer metric reached a high in January and February 2024, analysts note that some long-term holders may begin taking profits.

Several prominent Bitcoin analysts and investors have released correction alerts, warning of a potential 20-25% price decline in the coming weeks. The CryptoQuant bull-bear market cycle indicator has entered what researchers describe as an overheating phase, suggesting that the rapid price appreciation may need to cool before the next leg up.

Why This Matters

The convergence of near-universal profitability, record network growth, and unprecedented accumulation activity paints a picture of a maturing Bitcoin ecosystem experiencing significant institutional and retail interest. The popularity of spot Bitcoin ETFs, approved in the United States in January 2024, has been a major driver of this demand, channeling traditional finance capital directly into Bitcoin. However, the overheating signals serve as a reminder that even in strong bull markets, volatility remains an inherent characteristic of Bitcoin. Investors should monitor on-chain metrics closely as the market navigates this critical phase of the cycle.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions. Past performance is not indicative of future results.