For the primary time for the reason that depths of the 2022 bear market, greater than half of Bitcoin’s total circulating provide is sitting at an unrealized loss. The milestone is traditionally vital — and traditionally ominous. It marks a threshold that has all the time preceded a cycle backside, but in each prior occasion, it additionally arrived earlier than one ultimate, punishing leg decrease.
After a brutal stretch that noticed Bitcoin drop 28% from a excessive of round $82,000 to under $60,000, greater than 50% of its circulating provide is now underwater, in line with analysis and brokerage agency K33, with greater than 10 million BTC final having moved at costs above present ranges — up from simply 30% a month in the past.
In response to Glassnode information, the variety of cash in loss peaked at roughly 10.5 million BTC as the worth fell to as little as $61,300, towards a provide in revenue that declined to round 9.8 million BTC. The crossover of losses over earnings, Glassnode analysts famous, has traditionally coincided with main bear market bottoms.
A Threshold That Has Outlined Each Main Backside
The 50% stage carries well-established analytical weight. Each main Bitcoin bear market backside in 2011, 2014, 2018, and 2022 noticed greater than 50% of provide fall into loss territory, and the determine hardly ever climbs far past that ceiling, in line with K33. The structural motive is simple: a big share of outdated cash merely by no means strikes — both misplaced perpetually or held by long-term holders with no intention of promoting — that means they by no means register as being in loss, putting a pure ceiling on provide at a lack of round 50% to 56% in all former bear markets, in line with K33 head of analysis Vetle Lunde.
The 50% threshold didn’t arrive in isolation. Bitcoin briefly traded 4.29% under its 200-week shifting common throughout the June decline, a pattern line that earlier bear markets additionally reached earlier than forming their ultimate lows. The present drawdown has reached about 53% over roughly eight months — earlier main declines lasted about one 12 months and erased between 76% and 85%, making the current correction shorter and shallower. The Concern & Greed Index concurrently dropped to an excessive concern studying of 8, and Bitcoin’s RSI touched its lowest stage since November 2018.
BTCUSD vs 200-week shifting common. (Supply: K33)
Historical past Says Backside Is Close to — However Not But
The optimistic learn is evident: each time this cluster of indicators has fired collectively, a significant low adopted inside weeks. Within the 2011, 2018, and 2022 bear markets, Bitcoin bottomed inside one month of first seeing greater than 50% of provide buying and selling at a loss, with one-year returns from that crossing starting from 69% to 359%.
The constant caveat, nevertheless, is that the ultimate low all the time got here after yet another flush. In every prior case, Bitcoin printed its trough 15% to 26% under the extent at which the 50% underwater threshold was first crossed. The 2014 cycle was the starkest warning. Bitcoin took 101 days to backside after crossing the 50% mark and fell one other 46% within the course of — demonstrating that the sign can arrive considerably early.
In the meantime, Wintermute analysts flagged Technique’s disclosure that it bought 32 BTC — the agency’s first Bitcoin sale since 2022 — as carrying outsized symbolic weight. “32 BTC is immaterial. Saylor promoting for the primary time in 4 years, right into a market already bleeding flows, shouldn’t be,” Wintermute wrote, noting that US establishments led the sell-off with ETF information reflecting the pattern.
The share of the circulating bitcoin provide buying and selling at a loss. (Supply: K33)
Capitulation Has Not Arrived
The one most vital motive analysts are reluctant to name a confirmed backside is the absence of true capitulation in realized loss information. Bitcoin holders realized losses totaling 187,000 BTC over the previous 30 days — substantial in isolation, however effectively under the 400,000 BTC recorded when Bitcoin first fell under $60,000 in February 2026, and much in need of the 1.2 million BTC realized throughout the FTX-driven market backside in November 2022.
CryptoQuant head of analysis Julio Moreno mentioned realized losses haven’t reached capitulation ranges, including {that a} confirmed backside or bullish reversal should still take time to develop. CryptoQuant locations Bitcoin’s realized value — the mixture on-chain value foundation of all market individuals — at $53,600, a stage roughly 13% under the place Bitcoin presently trades. Traditionally, Bitcoin has bottomed at or marginally under the realized value in every main bear cycle.
Demand indicators compound the image. Complete Bitcoin demand fell by 652,000 BTC final week — the most important weekly contraction since January 2022. The 30-day change in demand for US spot Bitcoin ETFs dropped to detrimental 74,000 BTC, the bottom for the reason that merchandise launched in January 2024, that means the funds at the moment are appearing as a supply of extra provide somewhat than absorbing promoting stress.
BTCUSD vs durations of greater than 50% of provide buying and selling at a loss. (Supply: K33)
A Completely different Sort of Bear Market
Regardless of the near-term warning, there’s a structural case that the worst of this cycle is shallower by design. Bitcoin is down roughly 50% from its October 2025 all-time excessive of $126,080, making it the shallowest bear market drawdown in Bitcoin’s historical past. Earlier cycles produced 82% to 90% losses. “Bitcoin is now a extra institutionalized macro asset, supported by ETFs, deeper liquidity, and a bigger base of long-term allocators,” in line with Jeff Ko, chief analyst at CoinEx.
Through the 2018 bear market, provide in loss stayed above 50% for a number of months earlier than the last word December backside. In 2022, it briefly crossed the edge in June earlier than ultimate capitulation arrived in November. The sample suggests the underside is probably not three months away — however it’s possible not at this time both. The indicators are proper. The method shouldn’t be but full.
