On-chain Data Academy (Part 5): How Many People Are Actually Making Money? A Five-Minute Overview of the Objective Sentiment Indicator PSIP

By: blockbeats|2025/04/05 21:15:03

Original Article Title: "On-Chain Data Classroom (Part 5): How Many People Are Actually Making Money? A Five-Minute Guide to the Objective Sentiment Indicator PSIP!"

Original Article Author: Mr. Berg, On-Chain Data Analyst

This article is the 5th part of the On-Chain Data Classroom series, with a total of 10 parts. It will take you step by step through understanding on-chain data analysis. Interested readers are welcome to follow this series.

TL;DR

- This article will introduce the on-chain indicator PSIP

- PSIP = Percentage of Supply in Profit, among circulating $BTC

- It can serve as a guide to market sentiment, with applications in recognizing market tops and bottoms

What is PSIP?

PSIP, short for Percent Supply in Profit, is defined as "the percentage of circulating $BTC that is in a state of profit."

Calculation method:

It distinguishes profit and loss chips by "comparing each $BTC's last transfer price with the current price."

When the current price is higher than a certain $BTC's last transfer price, this $BTC is considered a profit chip.

On-chain Data Academy (Part 5): How Many People Are Actually Making Money? A Five-Minute Overview of the Objective Sentiment Indicator PSIP

What if Most Chips Are in a Loss...?

An important application scenario of PSIP is market bottoms. When most chips are in a loss, it is usually a good time to buy the dip.

The logic is straightforward:

Under similar conditions, the more profitable holders, the greater the selling pressure from profit-taking in the market, and vice versa.

As shown in the chart below, historical points where $BTC had PSIP <50% are marked, indicating very precise opportunities to buy the dip

-- Price

What if the Majority of Chips are in Profit?

As shown in the chart below, the percentage of chips in profit reaches a maximum value of 100%. Therefore, it is difficult to determine a top based solely on high PSIP.

Here is an interesting logic to share: “Observe the Correlation Change between PSIP and Price”

This idea is derived from the following analysis: The Market Pulse – Week 36, 2022

Conclusion

The above is all the content of On-Chain Data School (Part Five). For readers interested in further studying on-chain data analysis, remember to keep track of this series of articles!

If you want to see more analysis and teaching content on on-chain data, feel free to follow my Twitter account (X)!

I hope this article has been helpful to you. Thank you for reading.

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