Bitcoin supply in profit collapses toward bear-market levels
Since Bitcoin’s 2025 all-time high, BTC has struggled to start a durable upside move. On-chain indicators now suggest the bear phase is still active: “Bitcoin supply in profit” is shrinking quickly and is rapidly spilling into loss territory.
CryptoQuant analyst Darkfost reports profit supply is compressing toward multi-year lows, with nearly 1 BTC out of 2 held at a loss. The share of “Bitcoin supply in profit” is estimated around 59%, versus roughly 75% during the prior bear-market trough—implying current conditions are already worse than typical bear baselines.
Traders are urged to watch the ~50% profit-supply level, historically a zone where bear-market structure can bottom or flip toward accumulation. However, confidence usually fades further as profit shrinks. A separate view using MVRV Z-Score argues BTC has not entered a “green” bottoming zone, dismissing a ~$60,000 bottom call and projecting ~6 more months of bearish continuation.
Overall, the deterioration in “Bitcoin supply in profit” and the rising loss exposure point to continued downside risk until on-chain stress stabilizes.
Bearish
Profit is shrinking fast while loss exposure rises. That combination historically aligns with ongoing downside/volatility rather than an immediate trend reversal. The ~50% “Bitcoin supply in profit” threshold is noted as a potential inflection zone, but the current level (~59%) and the MVRV Z-Score view both argue the market has not yet reached a confirmed bottom, with the possibility of additional months of bear continuation. For traders, this typically favors risk management (lower leverage, tighter invalidation levels) and a wait-and-confirm approach for any long entries until on-chain stress stabilizes.