Key Takeaways:
More than half of all bitcoin in circulation is now held at an unrealized loss, a threshold that has marked every major bear-market bottom in the asset's history.
More than 10.5 million bitcoin — over half the circulating supply — is held at an unrealized loss, surpassing the depths of the FTX crash, Glassnode data shows.
"The magnitude of unrealized losses among long-term holders has now exceeded the lowest point of the 2022 bear market," James Check, lead analyst at Glassnode, said.
Supply in loss peaked at 10.5 million BTC as the price fell to $61,300 on Thursday, according to Glassnode data at a one-hour resolution. Supply in profit declined to roughly 9.8 million BTC, marking the first time in this cycle that loss-held coins outnumber profitable ones. The crossover has historically coincided with major bear-market bottoms, including 2015, 2019, March 2020 and the 2022 cycle.
The question is duration. Previous cycles saw this condition persist for as little as one month during the Covid capitulation to as long as 12 months in 2015. Bitcoin's realized price — the average acquisition cost of all coins — sits near $54,000, a level that has served as a floor in every prior bear market.
$3 Billion in Liquidations Shake Out Leverage
The on-chain pain comes as derivatives markets flash unambiguous bearish signals. Bitcoin plunged to $61,300 at 02:00 UTC before recovering to around $62,500, contributing to $3 billion in liquidations over two days, Coinglass data shows. Open interest fell 8.5% to $111.4 billion as leveraged positions were unwound.
Put skews have strengthened across both bitcoin and ether, with the $60,000 strike put on Deribit carrying over $1 billion in notional open interest. The $55,000 put was the most actively traded options contract in the past 24 hours, signaling that traders are pricing in further downside.
Bitcoin touched its 200-week moving average of roughly $61,300 during the selloff — a long-term trend indicator that has acted as a major support level during every bear market cycle. Should BTC break below the psychologically important $60,000 level, the next major support zone sits around $54,000, corresponding to the realized price.
Historical Precedent Offers Little Clarity on Timing
While the supply-in-loss crossover has aligned with bear-market lows in prior cycles, the duration of these periods has varied significantly. During the 2015 bear market, supply in loss and supply in profit remained near equilibrium for almost a year before the market recovered. In 2019, the period lasted roughly six months. The Covid-driven capitulation in March 2020 was shorter, lasting around one month, and the 2022 bear market saw this condition persist for about six months.
The takeaway: this signal has historically marked a bottom zone rather than a precise turning point. For long-term holders sitting on unrealized losses, the path forward depends on whether macro conditions — including U.S. interest rate expectations and equity market correlations — allow bitcoin to stabilize above its realized price.
This article is for informational purposes only and does not constitute investment advice.
