[Analysis] “Bitcoin: Most buyers over the past two years in the red…may be entering an undervalued zone”

A majority of those who bought Bitcoin (BTC) over the past two years are now sitting on losses, raising the possibility that the market is nearing an undervalued zone.

On the 2nd (local time), CryptoQuant contributor Crypto Dan said, “A significant portion of investors who bought Bitcoin over the past two years have now moved into loss territory,” adding that “this means the current price is forming at a level below the average purchase price of mid-term holders.”

He also pointed to the psychological structure of investment markets. “In general, sharp corrections tend to follow periods in which most market participants post large gains, whereas when broad-based loss zones form, selling pressure is largely relieved and rallies often unfold afterward,” he explained.

In particular, he argued that if Bitcoin falls below $60,000 and most investors—excluding ultra-long-term holdings—move into loss territory, it could be interpreted as a psychologically oversold area. The analysis noted that in past cycles, there were cases where mid- to long-term bottoms formed under a similar structure.

However, he added that the current market structure is not entirely the same as in the past. “Since the introduction of spot exchange-traded funds (ETFs), multiple factors—including fund flows, a higher share of institutional participation, and macroeconomic variables—are influencing price formation, making it difficult to conclude that past patterns will simply repeat,” Crypto Dan said.

He also added, “While a large-scale loss zone does not necessarily imply an immediate rebound, it is well worth watching as a signal suggesting that a market bottom may be approaching.”