For the first time since the depths of the 2022 bear market, more than half of Bitcoin’s entire circulating supply is sitting at an unrealized loss. The milestone is historically significant — and historically ominous. It marks a threshold that has always preceded a cycle bottom, yet in every prior instance, it also arrived before one final, punishing leg lower.
After a brutal stretch that saw Bitcoin drop 28% from a high of around $82,000 to below $60,000, more than 50% of its circulating supply is now underwater, according to research and brokerage firm K33, with more than 10 million BTC last having moved at prices above current levels — up from just 30% a month ago.
According to Glassnode data, the number of coins in loss peaked at approximately 10.5 million BTC as the price fell to as low as $61,300, against a supply in profit that declined to around 9.8 million BTC. The crossover of losses over profits, Glassnode analysts noted, has historically coincided with major bear market bottoms.
A Threshold That Has Defined Every Major Bottom
The 50% level carries well-established analytical weight. Every major Bitcoin bear market bottom in 2011, 2014, 2018, and 2022 saw more than 50% of supply fall into loss territory, and the figure rarely climbs far beyond that ceiling, according to K33. The structural reason is straightforward: a large share of old coins simply never moves — either lost forever or held by long-term holders with no intention of selling — meaning they never register as being in loss, placing a natural ceiling on supply at a loss of around 50% to 56% in all former bear markets, according to K33 head of research Vetle Lunde.
The 50% threshold did not arrive in isolation. Bitcoin briefly traded 4.29% below its 200-week moving average during the June decline, a trend line that earlier bear markets also reached before forming their final lows. The current drawdown has reached about 53% over roughly eight months — previous major declines lasted about one year and erased between 76% and 85%, making the present correction shorter and shallower. The Fear & Greed Index simultaneously dropped to an extreme fear reading of 8, and Bitcoin’s RSI touched its lowest level since November 2018.
BTCUSD vs 200-week moving average. (Source: K33)
History Says Bottom Is Near — But Not Yet
The optimistic read is clear: every time this cluster of signals has fired together, a major low followed within weeks. In the 2011, 2018, and 2022 bear markets, Bitcoin bottomed within one month of first seeing more than 50% of supply trading at a loss, with one-year returns from that crossing ranging from 69% to 359%.
The consistent caveat, however, is that the final low always came after one more flush. In each prior case, Bitcoin printed its trough 15% to 26% below the level at which the 50% underwater threshold was first crossed. The 2014 cycle was the starkest warning. Bitcoin took 101 days to bottom after crossing the 50% mark and fell another 46% in the process — demonstrating that the signal can arrive significantly early.
Meanwhile, Wintermute analysts flagged Strategy’s disclosure that it sold 32 BTC — the firm’s first Bitcoin sale since 2022 — as carrying outsized symbolic weight. “32 BTC is immaterial. Saylor selling for the first time in four years, into a market already bleeding flows, is not,” Wintermute wrote, noting that US institutions led the sell-off with ETF data reflecting the trend.
The percentage of the circulating bitcoin supply trading at a loss. (Source: K33)
Capitulation Has Not Arrived
The single most important reason analysts are reluctant to call a confirmed bottom is the absence of true capitulation in realized loss data. Bitcoin holders realized losses totaling 187,000 BTC over the past 30 days — substantial in isolation, but well below the 400,000 BTC recorded when Bitcoin first fell below $60,000 in February 2026, and far short of the 1.2 million BTC realized during the FTX-driven market bottom in November 2022.
CryptoQuant head of research Julio Moreno said realized losses have not reached capitulation levels, adding that a confirmed bottom or bullish reversal may still take time to develop. CryptoQuant places Bitcoin’s realized price — the aggregate on-chain cost basis of all market participants — at $53,600, a level approximately 13% below where Bitcoin currently trades. Historically, Bitcoin has bottomed at or marginally below the realized price in each major bear cycle.
Demand indicators compound the picture. Total Bitcoin demand fell by 652,000 BTC last week — the largest weekly contraction since January 2022. The 30-day change in demand for US spot Bitcoin ETFs dropped to negative 74,000 BTC, the lowest since the products launched in January 2024, meaning the funds are now acting as a source of additional supply rather than absorbing selling pressure.
BTCUSD vs periods of more than 50% of supply trading at a loss. (Source: K33)
A Different Kind of Bear Market
Despite the near-term caution, there is a structural case that the worst of this cycle is shallower by design. Bitcoin is down roughly 50% from its October 2025 all-time high of $126,080, making it the shallowest bear market drawdown in Bitcoin’s history. Previous cycles produced 82% to 90% losses. “Bitcoin is now a more institutionalized macro asset, supported by ETFs, deeper liquidity, and a larger base of long-term allocators,” according to Jeff Ko, chief analyst at CoinEx.
During the 2018 bear market, supply in loss stayed above 50% for several months before the ultimate December bottom. In 2022, it briefly crossed the threshold in June before final capitulation arrived in November. The pattern suggests the bottom may not be three months away — but it is likely not today either. The signals are right. The process is not yet complete.
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