Bitcoin Profit Supply Near Bear Levels as Loss-Making Holdings Rise

On-chain data suggests Bitcoin profit supply is compressing toward historical bear-market conditions. CryptoQuant analyst Darkfost says about 11.2M BTC remain in profit, near late-stage drawdown levels. At the last bear-cycle trough, profit supply fell to roughly 9M BTC. Meanwhile, loss-making supply is rising to ~8.2M BTC (Glassnode), the highest since late 2022. In the prior bear market, loss supply peaked near 10.6M BTC, implying there may be room for further underwater expansion if stress worsens. The article notes that Bitcoin profit supply converging toward network average acquisition cost often precedes capitulation-like behavior, with fewer holders able to absorb downside. Two interpretations are cited. Darkfost argues this points to mid-bear market stress rather than full capitulation. Andri Fauzan Adziima (Bitrue) warns the structural reset may be incomplete, placing a potential bottom around $55K but expecting more downside or prolonged consolidation. He highlights that earlier cycle bottoms showed deeper resets across multiple metrics (e.g., much larger loss-making share and extreme net unrealized P/L readings). Macro factors also enter the outlook. Analysts link weaker crypto conditions to persistent U.S. dollar strength and tighter global liquidity; a shift may require falling U.S. rates and a weaker dollar, unlikely before late 2026 or 2027. For traders, the key takeaway is that Bitcoin profit supply is deteriorating while Bitcoin loss exposure expands—signals that typically favor volatility and downside risk until on-chain stress stabilizes.