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 last, 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 response to 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 knowledge, the variety of cash in loss peaked at roughly 10.5 million BTC as the value fell to as little as $61,300, in opposition to a provide in revenue that declined to round 9.8 million BTC. The crossover of losses over income, Glassnode analysts famous, has traditionally coincided with main bear market bottoms.
A Threshold That Has Outlined Each Main Backside
The 50% degree 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 response to K33. The structural cause is easy: a big share of previous 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 response to 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 in the course of the June decline, a development line that earlier bear markets additionally reached earlier than forming their last lows. The present drawdown has reached about 53% over roughly eight months — earlier main declines lasted about one yr 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 degree 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 obvious: each time this cluster of alerts has fired collectively, a serious 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, nonetheless, is that the ultimate low all the time got here after 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, will not be,” Wintermute wrote, noting that US establishments led the sell-off with ETF knowledge reflecting the development.
The proportion of the circulating bitcoin provide buying and selling at a loss. (Supply: K33)
Capitulation Has Not Arrived
The only most essential cause analysts are reluctant to name a confirmed backside is the absence of true capitulation in realized loss knowledge. 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 wanting the 1.2 million BTC realized in the course of 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 combination on-chain price foundation of all market members — at $53,600, a degree 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 adverse 74,000 BTC, the bottom for the reason that merchandise launched in January 2024, that means the funds at the moment are performing as a supply of further provide relatively than absorbing promoting strain.
BTCUSD vs intervals of greater than 50% of provide buying and selling at a loss. (Supply: K33)
A Totally different Type 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 response to Jeff Ko, chief analyst at CoinEx.
In the course of the 2018 bear market, provide in loss stayed above 50% for a number of months earlier than the final word December backside. In 2022, it briefly crossed the brink in June earlier than last capitulation arrived in November. The sample suggests the underside will not be three months away — however it’s possible not at present both. The alerts are proper. The method will not be but full.
