According to reporting by CoinDesk, Bitcoin has triggered one of its most historically reliable bear-market signals: more than half of all coins in circulation are now sitting on unrealized losses.
The metric breached a critical threshold this week as the price dipped to $61,300 on Thursday. Glassnode data showed that 10.5 million Bitcoin—out of roughly 20 million in total circulation—were held at a loss at the time, while only 9.8 million coins remained in profit. This represents the first time during the current market cycle that underwater holdings have exceeded profitable ones.
The significance lies in what comes next. Historically, this crossover has occurred only during severe bear markets and has consistently aligned with or preceded major price bottoms across multiple cycles. For investors and traders watching for capitulation signals, it’s a flashing yellow light.
A Pattern Across Market Cycles
The duration of these periods varies considerably, offering little certainty about the timeframe for recovery. During the 2015 bear market, the balance remained near equilibrium for nearly a year before recovery took hold. The 2019 downturn lasted roughly six months. The Covid-driven capitulation in March 2020 was sharp and brief—just one month—while the 2022 bear market saw the condition persist for about six months.
This inconsistency complicates any attempt to forecast when Bitcoin might stabilize. What the metric reliably indicates is that a bottom is being approached, not when it will arrive.
Key Support Levels in Play
Bitcoin’s breach of the 200-week moving average near $61,300 carries additional weight. This long-term trend indicator has functioned as a major support level during every bear-market cycle, making its failure a material development.
The next meaningful floor sits at $54,000, corresponding to Bitcoin’s realized price—the average acquisition cost of all coins in circulation weighted by the price at which each unit last moved on-chain. Bitcoin has historically traded below this level during every major bear market, though rarely for extended periods.
If the $60,000 psychological level collapses, expect volatility to increase sharply as traders and long-term holders confront the reality of deeper losses. The realized price boundary would then become the true test of market conviction.
What the Data Suggests
On-chain metrics like supply in loss have emerged as legitimate tools for identifying capitulation phases. They strip away sentiment and noise, instead measuring the actual distribution of holdings across price points. When the majority of Bitcoin holders are underwater, the natural question follows: who sells next?
The answer, historically, is nobody—not at meaningful scale. Instead, prices stabilize, volatility eventually contracts, and recovery begins. But this signal alone doesn’t trigger that recovery. It merely signals that the conditions for one are forming.