Record 10M BTC Now ‘In Loss’ as Supply in Unrealized Losses Spikes — Market Stress Rises
Bitcoin’s unrealized-loss supply surged sharply after a recent price pullback, with on-chain analytics showing roughly 10 million BTC now sitting “in loss” — among the highest readings on record. Data shared by analyst James Van Straten indicates an additional ~70,000 BTC purchased between Feb 6–24 moved into loss, pushing the proportion of circulating supply at a loss toward 50% (circulating supply ~20M BTC). Long-term holders (LTHs) still show average unrealized profits near 74% but that metric is falling toward the estimated LTH cost basis of ~$38,900. Analysts note that past bear-market capitulations typically occurred when price breached the LTH cost basis and realized losses reached around 20%, after which market bottoms formed. Given institutional and structural changes in this cycle, outcomes may differ, but the spike in supply-at-loss signals elevated market stress and raises the potential that sufficient capital destruction could mark or hasten a market bottom. Key takeaways for traders: rising unrealized losses increase selling pressure and volatility; watch LTH cost basis (~$38.9k), supply-in-loss trends, and short-term holder behavior for signs of capitulation or recovery.
Bearish
The sharp increase in BTC supply sitting at an unrealized loss to roughly 10 million BTC (about 50% of circulating supply) signals elevated selling pressure and market stress. Historically, large-scale unrealized/realized losses — especially when price breaches the long-term holder cost basis — coincide with capitulation phases that amplify volatility and downward momentum before a bottom forms. Short-term effects likely include increased volatility, higher sell-side pressure from underwater holders, and potential further downside as weak hands exit. Longer-term, extensive capital destruction can create conditions for a durable bottom and subsequent recovery, but timing is uncertain and may be influenced by institutional flows and macro factors. Traders should monitor: supply-in-loss trends, movement of LTHs vs STHs, realized losses metrics, and on-chain exchanges inflows; use tighter risk management, watch for capitulation signs (volume spikes, realized loss spikes) for potential high-conviction buy opportunities, and avoid assuming an immediate trend reversal solely from a single metric.