Bitcoin Supply in Loss Shows Upward Movement: A Potential Early Bear Market Indicator?

Recent on-chain data indicates that the Bitcoin Supply in Loss indicator is showing an upward trend, a sign that might signal an impending bearish phase, based on historical patterns.

Key Takeaways

The Bitcoin Supply in Loss metric reflects the percentage of Bitcoin held at a net unrealized loss.
A recent shift in this indicator often aligns with the early stages of bear markets in the past.
The 365-day simple moving average (SMA) for Bitcoin Supply in Loss has been increasing in recent weeks, following a significant drop in October.
Current Bitcoin prices are approximately $89,000, with a slight uptick in the last 24 hours.

Bitcoin

Understanding the Bitcoin Supply in Loss Indicator

According to insights shared in a CryptoQuant Quicktake post, discussions around the Bitcoin Supply in Loss show that this crucial metric has begun to trend upward again. This metric calculates the percentage of Bitcoin within the total circulating supply that is currently experiencing a net unrealized loss.

The methodology behind this indicator involves examining the transaction history of each Bitcoin in circulation. When the last transaction price of any Bitcoin exceeds its current market price, that Bitcoin is considered to be "underwater."

Supply in Loss vs. Supply in Profit

The Supply in Loss aggregates all the coins in this category and determines what fraction of the total supply they represent. There's also a related metric known as the Supply in Profit, which tracks the opposite scenario. Since these two metrics combined must equal 100%, the Supply in Profit is calculated by simply subtracting the Supply in Loss from 100%.

Here’s a chart illustrating the trend in the 365-day simple moving average (SMA) of the Bitcoin Supply in Loss throughout the cryptocurrency's history:

Bitcoin Supply in Loss

The graph indicates that the 365-day SMA of Bitcoin Supply in Loss fell to its lowest level in October. This drop coincided with a rally that pushed Bitcoin to an all-time high (ATH) beyond $126,000.

Since reaching this low, the indicator has experienced a quick rise due to the bearish momentum affecting BTC after its ATH. The current level of the indicator is not significantly high compared to previous capitulation levels, but a definitive change in direction is forming.

As noted by the analyst, “Historically, this shift has marked the early phase of bear markets, when losses begin to spread from short-term holders to longer-term investors.” The chart further illustrates that past bearish transitions occurred alongside substantial increases in this indicator, which tended to coincide with market bottoms.

Whether this recent upward shift in the Supply in Loss marks the beginning of a similar trend remains uncertain. Earlier in this market cycle, a similar uptick ended up being short-lived as the market drew down in the first half of 2025 before entering a renewed bullish phase.

Current Bitcoin Price

As of now, Bitcoin is trading at around $89,000, reflecting a modest increase of over 1% in the last 24 hours.

Bitcoin Price Chart

The price has shown a recovery from its recent lows, signaling some resilience in the market.