43% of Bitcoin Supply Currently at a Loss as Market Approaches Bear Territory

A significant portion of the Bitcoin supply is now in a loss, indicating that the market is leaning towards a bear phase rather than a bull trend. Data from CryptoQuant contributor Darkfost reveals that 43% of Bitcoin is currently held at a loss in unspent transaction outputs (UTXOs). This suggests that investor confidence is dwindling, as the supply in profit remains below the historical average.

Key Takeaways

43% of Bitcoin supply is currently held at a loss.
Historical trends suggest that if the percentage of profit exceeds 75%, bullish trends are likely to accelerate.
Current macroeconomic factors, including rising oil prices, are contributing to pressure on Bitcoin prices.
The market is not yet definitively in a bear trend but is showing signs of drifting towards one.

43% of Bitcoin Supply Is In Loss As Market Nears Bear Territory

Current State of Bitcoin Supply

An increasing amount of Bitcoin supply has fallen below its cost basis, with CryptoQuant contributor Darkfost noting that the market appears to be entering conditions reminiscent of past bear phases. According to his latest analysis, 43% of Bitcoin supply in UTXOs is presently in loss, leaving only 57% in profit.

Darkfost is examining how Bitcoin's supply is distributed across its unspent transaction outputs. This approach helps to track how much of the Bitcoin supply is performing above or below its cost basis. His analysis indicates that the market is approaching levels that have historically signified a transition from bullish to bearish trends.

“Approximately half of the investors find themselves at a loss right now. Specifically, this statistic pertains to the supply held within each UTXO on Bitcoin, with 43% currently in loss,” he shared on X. He went on to explain that in the past, about 75% of the supply has typically remained in profit, a threshold he describes as a critical boundary between bull markets and market corrections.

Bitcoin percent supply in profit | Source: X @Darkfost_Coc

The significance of this framing lies in the market's future trajectory. Darkfost pointed out that when the percentage of profit rises above 75%, bull trends usually “confirm and accelerate.” Conversely, as more supply begins to show losses, it typically leads to deeper corrections, weaker confidence, and a market that resembles prior bear market structures. Currently, with Bitcoin at 57% of its supply in profit, he states that the circumstances feel “more in line with deep bear market phases.”

However, he does not depict this scenario as a straightforward decline. Darkfost indicated that there are signs of market stabilization, connected to the ongoing consolidation phase. He cautioned, though, that the market may still move lower, potentially increasing the share of supply in loss toward 45%, a level previously observed in bear markets.

Macroeconomic Pressures on Bitcoin

In his second analysis, Darkfost connects the weakening on-chain metrics to broader macroeconomic factors that have become less supportive of risk assets. He noted that escalating tensions near the Strait of Hormuz have triggered a rise in oil prices, further impacting Bitcoin's performance.

“Since the start of the year, oil prices have surged by over 60%, reflecting market uncertainties surrounding geopolitical issues,” he explained. He highlighted that the Strait of Hormuz is vital for global oil transit, accounting for about 20% of daily oil exports and nearly 35% of marine oil transport. Therefore, any disruption could have an immediate effect on oil prices.

Bitcoin vs. Brent Crude Oil | Source: X @Darkfost_Coc

Darkfost extended his analysis to explain that rising oil prices significantly contribute to inflation expectations and instigate broader financial market stresses—factors that traditionally do not favor speculative assets. “For a high-volatility asset like Bitcoin, such an environment is challenging,” he noted, adding that historically, periods of increasing oil prices often coincide with the concluding phases of Bitcoin cycles. These instances also tend to correlate with geopolitical tensions that discourage risk-taking.

Overall, the two analyses present a market that has not yet definitively entered a bear phase but is gradually transitioning towards that classification. The key question remains whether Bitcoin can regenerate the proportion of supply back into profit, reclaiming the typical 75% threshold, or whether adverse macroeconomic conditions and the selling pressure from long-term holders will push the market further into the loss category.

At the time of writing, Bitcoin is trading at $67,730.

Bitcoin price chart Bitcoin trades below the 200-week EMA again, 1-week chart | Source: BTCUSDT on TradingView.com