Bitcoin Supply in Loss Hits 40.6%, But Analyst Says Bottom Not Yet Confirmed

The percentage of Bitcoin’s circulating supply currently sitting at a loss has climbed to 40.6%, a level that historically signals significant market stress. However, according to on-chain analyst Julio Moreno, this metric alone does not yet indicate a definitive market bottom.

In a detailed analysis published on CryptoQuant, Moreno examined historical data stretching back to 2015, revealing that major bear market bottoms have typically formed only when the supply-in-loss metric reaches the upper boundary of a long-term downtrend line. While the current figure is elevated, it remains below the thresholds seen in previous cycles.

Historical Context and Shifting Thresholds

Moreno’s research highlights a clear pattern: the percentage of supply needed to be in loss to mark a bottom has declined with each successive bear market. During the 2015 cycle, over 60% of Bitcoin’s supply was underwater before prices bottomed. In 2018, that threshold dropped to around 50%. The 2022 bear market saw a peak near 45%.

This declining trend suggests that the market is becoming more efficient at pricing in downturns, or that the composition of holders has shifted toward more resilient investors. Regardless, the current 40.6% level, while elevated, has not yet touched the downtrend line that has historically preceded major recoveries.

What This Means for Investors

For traders and long-term holders watching for a buying opportunity, Moreno’s analysis serves as a cautionary note. The data implies that further price weakness or a prolonged sideways movement could push the supply-in-loss metric higher, potentially retesting the critical trendline.

If that trendline is reached, it could signal a historically favorable entry point. Until then, the analyst suggests patience may be warranted, as the market has not yet reached the extreme levels of stress that have preceded previous bottoms.

Why This Matters

Understanding on-chain metrics like supply in loss helps investors differentiate between normal market corrections and genuine capitulation events. It provides a data-driven framework for decision-making, rather than relying on sentiment or price action alone.

For the broader crypto market, Bitcoin’s on-chain health often sets the tone for altcoins. A confirmed bottom in Bitcoin could pave the way for a broader recovery, while continued weakness may extend the bearish environment.

Conclusion

Bitcoin’s supply in loss at 40.6% reflects real market pain, but historical data from CryptoQuant analyst Julio Moreno suggests the bottom may not yet be in. Investors should monitor whether this metric continues to rise toward the long-term trendline, which has historically marked prime accumulation zones. Until then, the market remains in a state of uncertainty, and patience may be the most prudent strategy.

FAQs

Q1: What does ‘supply in loss’ mean for Bitcoin?
It refers to the percentage of Bitcoin’s circulating supply that was purchased at a higher price than the current market value. A high percentage indicates widespread unrealized losses among holders.

Q2: Has the 40.6% level ever marked a bottom before?
Not in the current cycle. Historical data shows that previous bottoms occurred at higher thresholds, such as 60% in 2015 and 50% in 2018. The 40.6% level is below those historical markers.

Q3: Should I buy Bitcoin now based on this metric?
The analyst advises caution. While the metric is elevated, it has not yet reached the historical trendline that has signaled strong buying opportunities. Further price declines or sideways movement may be needed before a bottom is confirmed.