[Analysis] "Bitcoin 'Supply in Loss' surges…a signal it is nearing a bottom"

Bitcoin’s (BTC) “Supply in Loss” has recently been shown to exceed 40%. The analysis suggests Bitcoin’s price is nearing a bottom.

Woominkyu, a CryptoQuant contributor, said on the 1st (local time) via CryptoQuant that “Bitcoin’s ‘Supply in Profit’ has fallen to its lowest level in the past several years, while the supply in loss is surging.” He added, “This combination has repeatedly appeared in the final stage of past market corrections.”

According to CryptoQuant, Bitcoin’s supply in loss was recently tallied at 43%. Woominkyu noted, “Nearly half of (Bitcoin’s) total supply has entered loss territory,” adding that “such a broad loss distribution is a typical hallmark seen right before a bottom is formed.”

He also pointed out that “by contrast, ‘Supply in Profit’ has dropped to 56.9%, nearing the 50% level.” He analyzed that “whenever the share of (Bitcoin) in profit falls to this level, it is interpreted as a situation in which most speculative froth has disappeared,” adding that “short-term holders (STH) also appear to have exited the market to a considerable extent.”

He also mentioned the Realized Price, an indicator showing the average price at which investors bought a given cryptocurrency. Woominkyu said, “Bitcoin is currently testing a realized price of $54,100,” and added that “this price zone is a key area that served as a strong macro support level in the 2019, 2020, and 2023 cycles.”

Woominkyu’s assessment is that the Bitcoin market has entered a “Maximum Pain” zone. He said, “In the past, major trend reversals followed after these three conditions were met at the same time,” adding, “In particular, the point at which more than 40% of total supply enters loss territory suggests the price may be closer to a bottom than market participants feel.”