On-chain data from analytics platform CryptoQuant reveals that the percentage of Bitcoin's circulating supply held at a loss has surged to 44%. This metric, which measures BTC held below its purchase price, has historically served as a warning signal; levels above 40% often correlate with bearish momentum or the onset of a new bear market cycle.
Analyst Woominkyu interprets this rapid climb in the "supply in loss" metric, paired with a decline in the "supply in profit," as indicative of a structural market shift. He argues this pattern is characteristic of an early bear market phase rather than a healthy bull market correction. The concern is that selling pressure is spreading quietly through the supply, potentially accelerating later as more holders fall into a loss position and market liquidity thins out.
However, not all analysts share this bleak outlook. A chart shared by Ali Charts draws a comparison between Bitcoin's current price structure and a historical consolidation and breakout pattern seen in Alphabet (Google). This analysis suggests Bitcoin may be in a prolonged consolidation phase that could resolve with an upside breakout and trend continuation, rather than a prolonged decline.
The 44% figure, while significant, has not yet reached the extreme levels (50-60%) witnessed during past bear market bottoms. Nonetheless, CryptoQuant and other analysts warn that this on-chain signal, combined with factors like reduced trading volume and macroeconomic pressures, should make investors cautious of increased near-term volatility and further potential downside risk.
