Analysis: Nearly Half of Bitcoin Supply Is Underwater, Signaling Bear Market's Late Stage

Nearly half of the circulating supply of Bitcoin is being held at a loss, according to CryptoQuant data.

On August 5, CryptoQuant contributor Darkfost wrote on X that only 52% of Bitcoin supply is currently in profit, leaving close to half of all coins underwater.

Historically, the indicator has marked a key turning point in bear markets when it falls to around 50%. In every bear market, there was ultimately a period when more Bitcoin was held at a loss than at a profit. The metric briefly dipped below 50% in June and July this year, but did not remain there for long, suggesting the current bear market is already well advanced.

Darkfost added that it remains unclear where the market's final bottom will form. While the exact bottom price cannot be known, the market is entering the final phase of the bear market. Historically, that has been a hallmark of the process leading to a final bottom.