The share of bitcoins that are at a loss is steadily increasing and is approaching the 45% mark. This potentially signals the beginning of a bear market, but the final bottom is still far off.
This is reported by Finway
Dynamics of Loss-Making Bitcoins and Their Impact on the Market
According to CryptoQuant analytics, the Bitcoin Supply in Loss metric currently fluctuates between 40-45%. This indicator reflects the share of bitcoin supply purchased at a price higher than the current market rate. An increase in this metric means that more cryptocurrency holders are retaining assets at a loss, which in turn intensifies pressure on the market.
Historical analysis shows that similar levels of the share of loss-making bitcoins have been observed during transitions to bear market phases or during periods of deep corrections. For instance, in 2015, 2019, and 2022, the increase in the share of coins at a loss was accompanied by heightened market stress and an increase in realized losses. CryptoQuant specialists emphasize that such dynamics may indicate a weakening market structure, as more market participants hold bitcoin at prices lower than their purchase price, which is traditionally associated with deteriorating sentiment.
Is the Market Bottom Close and What Do the Indicators Say?
Despite the increase in the share of bitcoins at a loss, analysts note that market bottoms are usually formed when this metric exceeds approximately 50%. The current level has not yet reached this threshold, so the rise in the index may only indicate an early stage of the bear cycle, rather than the end of the decline.
Additionally, CryptoQuant draws attention to the coin holding ratio in the range of one week to one month – this is one of the key indicators of short-term bitcoin liquidity. Analysis of previous cycles has shown that a significant drop in this metric is usually recorded near market lows, indicating the likelihood of approaching an undervalued zone.
“Currently, this indicator has also fallen significantly. Although the current level is still somewhat high to definitively claim that ‘this is the bottom’, historical data interpretation suggests that the market has entered a zone that is quite close to undervalued territory,” analysts concluded.
Moreover, K33 experts previously noted that bitcoin has reached one of the most oversold levels in history. This may indicate a growing interest in the asset among investors who are anticipating a market recovery.