Bitcoin Metric Signals Possible Bear Market Bottom

According to glassnode data, the current bitcoin market shows that more than half of the circulating supply, approximately 10.5 million bitcoin, is held at an unrealized loss compared to around 9.8 million in profit. This situation occurred as the bitcoin price adjusted to significant support levels, touching its 200-week moving average at $61,300.

Historically, when the amount of bitcoin in loss exceeds those in profit, it often signals a bear market bottom. This is the first instance in the current market cycle where the supply of bitcoin at a loss has outnumbered that in profit. Previous patterns indicate that during earlier bear markets—such as in 2015, 2019, and the COVID-19 market drop in March 2020—this transition occurred at various durations ranging from one month to a year before markets recovered.

The 200-week moving average serves as a crucial support indicator and has consistently marked turning points in previous bear cycles. Analysts note that should bitcoin fall below the critical $60,000 threshold, the next major support level lies around $54,000, which corresponds to the realized price—the average cost basis of bitcoins in circulation.

"While this signal has historically aligned with bear market lows, the duration of these periods has varied significantly, making it difficult to estimate how long bitcoin could remain at depressed levels," said the analyst.

This recent data illustrates the shifting dynamics within the bitcoin market, highlighting the importance of monitoring these thresholds as they may provide insights into future market behavior.