Bitcoin Price Issues a Caution as Nearly Half of Supply Faces Losses

Almost 9 million BTC, representing about 45–46% of Bitcoin's circulating supply, are currently showing losses. Historically, this situation has often preceded either significant market selling or a period of accumulation. The last occurrence of this metric was in January 2023, shortly after the FTX collapse, which led to a prolonged market consolidation rather than a rapid rebound. Traders must consider whether current conditions will repeat history or take a different course.

Key Takeaways

Approximately 9 million BTC (about 45–46% of Bitcoin's circulating supply) are currently underwater, with short-term holders facing $113.9 billion in unrealized losses.
Historical patterns suggest that similar metrics have been observed in January 2023 (post-FTX), mid-2022, and mid-2018, each leading to further declines of 25% or more before stabilization occurred.
Bitcoin's current trading price is between $65,200 and $66,689, which is about 47% below its all-time high of over $126,000 in October 2025.
Key price levels to watch include $63,000 as critical support and $69,000 as significant resistance, tied to the realized price for one-month holders.
Watch for indicators such as ETF weekly flows, activity from large investors (whales), and the Bitcoin Impact Index, currently at 57.4, as potential signals of market movement.

The Bitcoin price is at a pivotal point with significant unrealized losses. Explore the past trends and possible future scenarios.

Analyzing the Underwater Supply of Bitcoin

The focus here is on the percentage of the Bitcoin supply that is incurring losses—this metric counts every coin whose last recorded transaction was at a higher price than today's. Currently, with Bitcoin around $65,200, the number of underwater BTC has approached 9 million, with peaks nearing 10 million during recent local lows. Notably, long-term holders, or those who have not moved their coins in over six months, hold about 4.6 million BTC—30% of their total holdings—at a loss, representing their most significant losses since 2023.

Past trends reveal a consistent pattern. In mid-2018, similar conditions led to a dramatic 50% drop, culminating in a December low of $3,200. In mid-2022, the same situation preceded further losses down to $17,500. The January 2023 event, however, defied this trend; despite similar signals, exhausted forced selling allowed the market to recover smoothly without a subsequent decline.

Market trends related to Bitcoin

What mattered in 2023 was the lack of substantial sell-side pressure, a distinction that is still significant today. Analysts from CryptoQuant have highlighted that when a large percentage of the supply becomes unprofitable, markets typically face either capitulation phases or late-stage accumulation zones. Currently, market data suggests a tilt towards the former scenario.

Is Bitcoin's On-Chain Setup Indicating a Price Rebound or Further Decline?

Year-to-date, spot Bitcoin ETFs have witnessed $3 billion in net outflows, with investors' average entry price sitting at $83,956—a 23% paper loss compared to current prices. Last week, ETF participants reportedly sold off over 600 BTC daily. This risk-averse sentiment around ETFs is exacerbating an already strained on-chain landscape where whales have offloaded more than 43,000 BTC in just the past week.

Bitcoin on-chain activity trends

The Bitcoin Impact Index currently stands at 57.4, a level historically linked to significant price movements in either direction. For the one-month holder group, the realized price sits around $69,000, and for the one to three-month holders, it's near $90,000—both now acting as resistance levels rather than support.

Sean Rose from Glassnode noted that the key feature of this downtrend is a "persistent loss realization into rebounds," contrasting with an explosive sell-off. This gradual decline from the $126,000 peak has unfolded through various major levels, such as $100,000, $90,000, and $80,000, without triggering a day of panic selling.

At this juncture, market pressure and flows play crucial roles. If ETF demand reverses and leads to strong inflows—potentially $500 million weekly—while whales continue acquiring during dips, Bitcoin may find the strength to reclaim $69,000 and climb higher. However, the most likely scenario remains one of compression, with price movements contained between $63,000 and $69,000. The market is working through substantial underwater supply. The absence of a clear flush suggests a slow and uncertain path ahead.

The $63,000 level is critical; a daily close below it may trigger another wave of liquidations, particularly affecting short-term holders, resulting in quick downward price movement as more assets flood the market.

Keep an eye on weekly ETF flow data, which has been a reliable early indicator of Bitcoin price direction over the past six months. A week reporting net inflows exceeding $1 billion would signal a strong start for a bullish case. In contrast, any uptick in whale outflows beyond the current level of 43,000 BTC weekly could act as a bearish trigger.

The six months of consistent bearish conditions leading up to this underwater supply reading have unfolded without a significant shock, making resolution timing challenging. The market might still need the capitulation moment that never arrived.

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