Since peaking at $126,000, Bitcoin has fallen [BTC] has been trading within a declining channel, with sellers cashing out any profits.
At the time of writing, the King Coin was trading at $66,689, down 20% on the monthly chart and 47% from the ATH.
With Bitcoin stuck in a long-term bearish trend, investors and all market participants are facing significant losses.
46% of Bitcoin supply is now loss-making
Based on Bitcoin’s realized price UTXO age bands, most holders have held BTC at a loss for more than a month.
The realized price for 1-month holders is now around $69,000, while the 1-3 month cohort is around $90,000. With Bitcoin significantly below these levels, all these positions are in the red.
Source: CryptoQuant
As a result, Bitcoin supply trading at a loss has increased significantly. According to Maartunabout 9.09 million bitcoins are now in the red, representing about 46% of the circulating supply.
These losses are spread across both short-term and long-term holders. Checkonchain data shows that the unrealized loss of short-term holders is currently around $113.9 billion.
At the same time, unrealized losses of long-term holders currently amount to approximately $140 billion. The continued increase in losses indicates a strong bearish trend in the market.
Source: Checkonchain
Typically, higher loss rates create a risk of selling pressure as holders panic and capitulate, fearing further losses. According to Checkonchain, the realized loss even rose to $705 million on March 2.
Strategy and DATs count more losses
With losses mounting across the market, Strategy [MSTR] and other institutional investors are now operating underwater.
Although the MSTR has continued to accumulate during this bear market and holdings have risen to 717,724, the DCA strategy has not helped.
As such, with With an average cost basis of $76,000, 67% of Strategy’s Bitcoin stack is in the red. The value of the company’s holdings fell from a peak of $79 billion to $47 billion at the time of writing.
The same goes for the entire Digital Asset Treasuries holding BTC, with the total value of the holdings dropping from $125 million to $73 million.
What the continued losses mean for BTC
Traditionally, mounting losses preceded bearish implications for the market. Holders tend to capitulate, reducing risk exposure, causing higher selling pressure.
Often, higher pressure accelerates downside risk, leading to lower prices, as recently observed. Currently, the market is in a strong downward momentum as shown by the momentum indicators.
Looking at the Relative Vigor Index (RVGI), which is now negative, this indicates higher selling and lower buying activity. Such market conditions create room for more losses on the crypto price charts.
Source: TradingView
This possibility is further evidenced by the Future Grand Trend indicator, which pointed to a drop below $60,000 to $59,213.
Even more worrying is that BTC, according to the FGT, is likely to continue trading within a descending channel, with $45k as a bearish case.
Final summary
- Bitcoin losses have soared, with approximately 9.09 million BTC, or 46% of Bitcoin supply, currently in the red.
- BTC continues to trade in a declining channel, down 20% in the past 30 days.