After a brutal month for bitcoin (BTC) that saw the foremost cryptocurrency 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.
That's up from 30% a month ago. Still, it represents a threshold that has historically been reached only near major bear market bottoms, as selling pressure from profitable holders becomes increasingly exhausted, Head of Research Vetle Lunde said in a new report.
The percentage of the circulating bitcoin supply trading at a loss. Image: K33.
"A large percentage of old coins simply doesn't move, either due to coins being lost or due to coins being held by owners with no intention of ever selling, so they never fall into the 'in loss' bucket," Lunde said. "That has placed a natural ceiling on supply trading at a loss of around 50% to 56% in all former bear markets."
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, Lunde noted, though warning that in each case, it only came after one final leg lower, with bitcoin printing a low 15% to 26% below the level it traded at once supply in loss crossed 50%. However, one year out, bitcoin delivered gains ranging from 69% to 359% from the first 50% underwater crossing, he added.
