Bitcoin Supply Underwater Losses Near $600B

Over 40% of the bitcoin supply is now underwater, with losses nearing $600 billion. Bitcoin supply underwater losses are becoming a pattern, not an anomaly.

Bitcoin Price and Investment Trends

The current bitcoin price is around $66,820, roughly 47% below its all-time high of $126,000. Global bitcoin investment funds recorded more than $190 million in net outflows during the week ending March 27.

Spot Bitcoin ETFs Performance

Spot bitcoin ETFs are now sitting below water for many of their holders, with the average cost basis for US spot bitcoin ETF investors at $83,400.

Bitcoin Supply Held at a Loss

Close to 9 million bitcoin, more than 40% of the total circulating supply, are currently held by investors who paid more than the current price. The combined unrealized loss on that supply comes to roughly $598 billion.

Historical Comparison

According to Glassnode, resolving a supply overhang of this size has historically meant coins moving from sellers taking losses to new buyers willing to enter at lower prices.

Long-Term Holders and Market Demand

Long-term holders are selling at a loss at an elevated rate, with realized losses among long-term holders climbing to $200 million. Demand is not keeping up, with Capriole Investments' Bitcoin Apparent Demand metric logging a reading of -1,623 BTC.

Market Distribution and Capitulation

The situation is described as broad market distribution, driven by continued selling from retail participants. Active capitulation is confirmed, with long-term holders beginning to crack.

Key Takeaways

• Over 40% of the bitcoin supply is underwater, with losses nearing $600 billion.
• The current bitcoin price is roughly 47% below its all-time high.
• Long-term holders are selling at a loss at an elevated rate.
• Demand is not keeping up, with market distribution driven by retail selling.

Frequently Asked Questions

What is the current state of the bitcoin market?

The bitcoin market is experiencing a significant supply overhang, with over 40% of the supply held at a loss.

How are long-term holders affected by the current market trend?

Long-term holders are selling at a loss at an elevated rate, with realized losses climbing to $200 million.