Data from the Bitcoin Impact Index reveals that nearly half of all circulating Bitcoin (BTC) is now held at a loss, marking a sharp increase in market stress. The index, which measures financial stress based on on-chain behavior, ETF and derivatives activity, and liquidity flows, surged 13 points to 57.4 during the week ended March 28. This level places it squarely in the "high impact" zone, historically a precursor to broad selloffs that led to double-digit price drops in 2018, 2022, and earlier this year.
Long-term holders, defined as wallets holding BTC for more than six months, have shifted dramatically. Just a week ago, when BTC traded above $70,000, these holders were selling at a profit. Now, over 4.6 million BTC from these wallets—roughly 30% of their total holdings—are underwater, with realized losses last week being the worst since 2023. "This kind of divergence between price action and on-chain conviction has historically been a warning sign," CEX.IO noted, citing similar patterns before price drops exceeding 25% in mid-2018 and mid-2022.
Short-term holders are also under pressure, with 47% of the total Bitcoin supply currently held at a loss—levels not seen since the market's most stressed period in February. Supporting capital flows have reversed; daily stablecoin net flows, which averaged inflows of $250 million, flipped to outflows of $292 million. Additionally, ETFs and miners have moved from accumulation to selling.
Simultaneously, Bitcoin ETF investors are facing significant losses. CryptoQuant analyst J.A. Maartunn highlighted a notable divergence between Bitcoin's ETF realized price, ETF MVRV ratio, and spot price. With BTC trading below its ETF realized price, the ETF realized price ratio is near 0.9, indicating that the average spot ETF holder is approximately 10% down. This downturn reflects the spot price correction and means inflows from Bitcoin's mid-2025 rally have turned into unrealized losses, putting short-term ETF participants under massive pressure.
Despite the stress, one key support remains: on-chain data shows holders are not rushing to deposit BTC on exchanges en masse, a behavior typically seen during full capitulation events.
