Bitcoin’s recent downturn has pushed a growing portion of holders underwater, increasing tension across the network. The loss supply has now risen to 10.46 million BTC, marking the first time in this cycle that underwater coins have exceeded the gain supply.
Like Bitcoin [BTC] fell towards $60,000-$62,000, market profitability shrank sharply, and unrealized losses spread across multiple cohorts of holders. But this is also where the signal gets interesting.
Previous cycle bottoms occurred when more than 10 million BTC suffered losses. The reason is simple. Investors become less willing to sell after absorbing big declines, gradually easing pressure on the sell side.
If buyers start absorbing that supply, Bitcoin could move closer to a bottom. If not, perhaps a deeper capitulation lies ahead.
Bitcoin’s MVRV Signals a Deep Valuation Reset
Bitcoin’s sell-off has pushed the market value towards realized value [MVRV] Ratio reduced to 1.1, leaving the market only slightly above the total cost base. In practical terms, most of the speculative premium built up during the rally has already disappeared.
As prices fell towards the $60,000-$62,000 range, profitability tightened across the network and the market moved closer to levels that historically tested investor conviction. What is remarkable is where this level is in Bitcoin’s history.
A further decline towards the low $50,000s would likely push the MVRV to 1.0, a level that has rarely appeared outside major cycle lows. In other words: Bitcoin is no longer expensive. The question remains whether buyers are willing to intervene before complete capitulation becomes a reality.
Long-term holders return to net accumulation
The long-term holder’s net position change recently turned positive, signaling a shift in Bitcoin’s ownership structure. Recent data shows this cohort absorbing approximately 30,000-35,000 BTC over a 30-day period after months of mixed positioning.
The change signals that some investors are beginning to increase their exposure despite continued market uncertainty.
Historically, continued accumulation by long-term holders has often coincided with periods of supply gradually turning away from speculative participants.
However, the current pace remains moderate and not aggressive. For now, the data points to an improvement in conviction beneath the surface, although broader market participation remains subdued.
Final summary
- Bitcoin [BTC] now has 10.46 million coins underwater, pushing the valuation metrics to levels historically associated with major cycle bottoms.
- Long-term Bitcoin holders are accumulating again, although stronger demand remains necessary to confirm a sustainable recovery.