Nearly 41% of Bitcoin's circulating supply is now held at a loss, bringing the metric closer to a descending trendline that has historically signaled cycle bottoms.
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Bitcoin supply in loss hits 40.6% as cycle bottom pattern emerges
Bitcoin's supply in loss climbed to 40.6%, approaching a descending trendline that has marked every cycle bottom since 2015, CryptoQuant data shows.
MorenoDV, an analyst at CryptoQuant, said the metric has followed a declining pattern since 2015, with each successive cycle bottom forming at a lower percentage of supply underwater.
During the 2015-2016 cycle, more than 63% of Bitcoin supply was at a loss at the bottom. That figure fell to 59% in the 2018-2019 bear market and to 53% during the 2022-2023 bottoming period, according to CryptoQuant data. The descending trendline now places the historical threshold closer to the high-40% range, suggesting the current 40.6% reading signals meaningful stress but has not yet reached the zone that previously marked maximum opportunity for accumulation, the analyst said.
The declining loss thresholds across cycles reflect structural changes in Bitcoin's ownership base. Long-term holders, institutional investors and ETF allocators have reduced the share of speculative capital in the market, potentially lowering the level of supply stress required to form a cycle bottom, MorenoDV said.
Crypto commentator Frigg noted the pattern, pointing out that roughly four out of every 10 Bitcoin holders currently sit below their entry price. The commentator cautioned, however, that institutional participation does not guarantee market support, citing roughly $2 billion in spot Bitcoin ETF outflows during May as evidence that large investors can also reduce exposure during downturns.
Bitcoin traded at $68,834 as of 09:28 UTC on June 2, down 4.15% over the prior 24 hours, as selling pressure pushed the asset below the $70,000 support level. The decline accelerated the share of supply entering loss, with the metric rising from below 30% in early May to the current 40.6% reading.
The descending trendline that has defined Bitcoin cycle bottoms since 2015 now points to a potential accumulation zone near 48% to 50% supply in loss, according to CryptoQuant's analysis. The current reading at 40.6% suggests the market has not yet reached full capitulation, though the gap has narrowed significantly from levels seen earlier this year.
Should Bitcoin continue to consolidate or weaken further, the supply-in-loss metric could move closer to that trendline. Previous encounters with that structure have historically aligned with periods of long-term accumulation, with prices typically bottoming within weeks of the metric crossing the threshold.
This article is for informational purposes only and does not constitute investment advice.
