At the end of the week, the cryptocurrency market saw a sharp decline, with the price of Bitcoin falling sharply and falling below $70,000. As the price of BTC moved into a downtrend, the percentage of supply at a loss increased and reached a critical level.
An increasing number of Bitcoin holders are facing losses
After the sudden return of the weekend, Bitcoin the dynamics of the market are undergoing changes that may determine its direction in the coming days or weeks. As its current decline intensifies, BTC is still under bearish pressure, bringing a growing percentage of its circulating supply into the loss zone.
Darkfost, market expert and verified author on CryptoQuant, recently reported on the X platform, almost one out of two investors is now sitting at a loss. More precisely, it is the amount of Bitcoin that is stored in each Unexpended Transaction Result (UTXO).
This suggests that more Bitcoin is now being held at prices lower than their purchase price, which shows how short-term market participants are experiencing a lot of pressure. An increase in supply at a loss often occurs near times of market stabilization and is considered an important indicator of market sentiment.
Data on the chain currently shows that around 43% of the supply stored in UTXO has been lost, showing how much unrealized loss is spread across the network. In the past, the histogram shows that about 75% of the Bitcoin supply was profitable. The expert emphasized that this level often serves as a rough boundary between them bull trend and market correction.
Usually, when bull trends are confirmed, they gain momentum when the market breaks above this level. However, corrections usually occur when most of the supply starts to lose money. With a 57% profit margin, the market is currently at levels seen during deep bear market phases.
Bitcoin is showing signs of stabilization here, which coincides with the current consolidation. Meanwhile, the market could still fall further to shake up long-term holders. At the same time, the share of supply in losses can be pushed to about 45%, which is the level reached in previous bear markets.
BTC recovery on the ETF front
Even in the volatile landscape, fresh data from CryptoRus shows that Bitcoin is still witnessing a post-ATH supply recovery. During this period, Reserve BTC on cryptocurrency exchanges has decreased since the end of 2024, which means that there are fewer coins left on these trading platforms. In addition, this trend indicates a decline in sales as investors choose self-interested portfolios that emphasize long-term assets.
CryptoRus noted that Spot BTC ETF holdings fell after Bitcoin hit an all-time high, a situation that likely contributed to the recent price correction as demand from institutional investors waned. However, this ETF outflow is stabilizing, indicating an important shift in demand.
If The ETF is starting to record positive trends Again, while crypto exchange stocks continue to decline, the supply and demand balance for BTC can quickly tighten.
Featured image from Getty Images, chart from Tradingview.com
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