On-chain analytics firm CryptoQuant has issued a warning that Bitcoin may be showing early signs of a bear market transition. Analyst Woominkyu highlighted that the 365-day simple moving average (SMA) of Bitcoin's 'Supply in Loss' metric has recently reversed into an upward trend after hitting a cycle low in October 2025.
The 'Supply in Loss' indicator measures the percentage of Bitcoin's total circulating supply currently held at an unrealized loss, based on the price at which each coin was last moved. After Bitcoin rallied to a new all-time high beyond $126,000, the metric plummeted. However, following the subsequent bearish momentum, it has witnessed a rapid climb.
The analyst noted that this directional shift is significant because it has historically marked the early phase of bear markets. "In past cycles such as 2014, 2018, and 2022, this indicator had made an upward reversal before a true market bottom formed," stated Woominkyu. The pattern suggests a phase where losses begin to spread from short-term holders to long-term investors.
While the current level of Supply in Loss remains well below historical capitulation peaks, the firming upward movement itself is a cause for caution. "This suggests the market may be transitioning into a bear market structure rather than experiencing a temporary pullback within a bull trend," the analyst concluded. Bitcoin has been trading in a range between $84,000 and $95,000 for months, unable to break the downtrend that began in October, further fueling bearish sentiment.
