Bitcoin Supply In Loss Crosses Critical Threshold — Bullish Reversal Next?

Bitcoin's Supply In Loss metric has crossed above 10.46 million coins, a critical threshold historically associated with major market bottoms. Analyst Ali Martinez argues this signals diminishing selling pressure and a potential reversal, though current circulating supply levels suggest the metric may peak higher than in previous cycles.

The Bitcoin Supply In Loss metric tracks coins held at unrealized losses relative to their last acquisition price, serving as a gauge of investor sentiment and capitulation severity. When this figure exceeds 10 million BTC, historical data from 2018 and 2022 show the market typically bottomed shortly thereafter, as weakened selling pressure from loss-averse holders stabilized prices. The current breach at 10.46 million coins signals extreme fear conditions where more than half of circulating supply is underwater, potentially marking an inflection point where further downside becomes less likely.

However, the analysis requires important caveats. Bitcoin's circulating supply has grown to approximately 21 million coins, whereas it stood at 17.4 million in 2018 and 19.2 million in 2022. This structural difference means the Supply In Loss threshold might climb higher before bottoming, implying further price declines remain possible. The 2015 cycle demonstrated this dynamic—with lower supply then, the metric never reached 10 million before that cycle's reversal, suggesting proportional metrics matter more than absolute figures.

For investors, the signal presents a mixed picture. While historical patterns favor a reversal near current $62,700 levels, the larger supply base introduces uncertainty about how much lower Bitcoin could trade. The metric's value lies not in pinpointing exact bottoms but in identifying periods of reduced selling pressure—a necessary but insufficient condition for sustained reversals. Market participants should balance this technical signal against macroeconomic factors and regulatory developments that continue shaping Bitcoin's trajectory.

• →Bitcoin Supply In Loss crossed 10.46 million coins, a level historically preceding major market reversals in 2018 and 2022.
• →Reduced selling pressure from loss-averse holders typically emerges at this threshold, increasing probability of price stabilization.
• →Current circulating supply is larger than previous cycles, meaning the metric may peak higher before a bottom forms.
• →The signal indicates capitulation but does not guarantee immediate reversal without supporting macroeconomic conditions.
• →Bitcoin price recovered 2.5% in 24 hours to $62,746, aligning with the analyst's observation of price stabilization around $60,000.