CryptoQuant's latest on-chain data reveals that approximately 9.09 million Bitcoin (BTC), representing about 46% of the circulating supply, are currently held at a loss as the cryptocurrency trades around $66,500. This marks the second-deepest concentration of loss-making supply since 2022, surpassed only by the peak near negative 10 million coins during the market fallout following the collapses of Luna and FTX.
The report frames this as a cohort-specific issue, primarily affecting participants who bought during the 2024 to 2025 rally, with entry prices ranging from roughly $80,000 to $108,000. These recent buyers are now underwater, which is tightening overall market risk appetite and increasing sensitivity to price rebounds. The data indicates these holders are actively managing drawdown risk and reassessing their investment horizons on a daily basis.
Market expert Darkfost, a verified author at CryptoQuant, provided further analysis, noting that short-term Bitcoin holders are currently facing an average unrealized loss of 26.3%. Historically, periods where this metric exceeds 25% are often linked to advanced bear market phases. Darkfost pointed out that such stages have traditionally presented favorable accumulation opportunities for long-term investors using dollar-cost averaging (DCA) strategies.
The report highlights an adjusted realized price level near $72,700 as a key structural reference point. With Bitcoin's price trading below this level, the loss cohort is prominently visible. High loss supply creates predictable market dynamics, where underwater holders with the highest cost basis and least conviction tend to sell first. As this cohort exhausts itself, the remaining loss holders often become stronger hands, turning the loss concentration into both an overhang and a potential reset signal for the market.
Adding to the pressure, Bitcoin Spot Exchange-Traded Funds (ETFs) have experienced capital outflows for 25 consecutive days, as highlighted by investor Crypto Tice. This sustained bearish action in the funds suggests weakening conviction among some institutional investors and is contributing to questions about whether the market is facing a period of investor capitulation or supply exhaustion.
