The amount of Bitcoin supply in profit and loss is now getting closer to levels typical of a bear market, according to a CryptoQuant analyst.
There are currently about 11.2 million Bitcoin in profit. The previous bear market recorded 9 million BTC in profit at its lowest point, CryptoQuant analyst “Darkfost” said Thursday.
CryptoQuant data also shows there are about 8.2 million Bitcoin at a loss, with Glassnode data confirming it’s at levels not seen since late 2022.
“This is quite significant, considering that during the last bear market this figure reached about 10.6 million BTC,” Darkfost said.
Analysts have been debating whether Bitcoin has further to fall this year amid growing global turmoil. Bitcoin metrics that show a movement toward previous cycle lows could suggest that a market bottom is getting closer.
“This suggests that the market is reaching a notable level of undervaluation, comparable to the conditions observed during the previous bear market,” the analyst added.
Analyst sees increasing market stress, not undervaluation
However, Andri Fauzan Adziima, research lead at the Bitrue exchange, argued the data signals “increasing market stress, not immediate undervaluation.”
True capitulation bottoms saw deeper pain, he told Cointelegraph. The supply in loss in 2022 was greater than 50% and the supply in profit was around 45% or lower, while metrics such as net unrealized profit/loss (NUPL) and market value to realized value ratio (MVRV) were at “extremes.”
Current data points to early/mid-bear transition (potential structural bottom near $55,000), with more downside or consolidation likely before a full reset.
Data also shows Bitcoin has declined by about 52% from its all-time high this cycle, much less than previous bear markets, which saw 77% to 84% drawdowns from their cycle highs.
Strong Dollar hampering recovery
Bitcoin author Timothy Peterson commented on X that Bitcoin “tends to struggle when the dollar is strong, and the Chinese yuan is weak.”
He added that this was due to tighter global liquidity, with higher dollar yields attracting capital into cash and bonds and cautious investor sentiment as China eases policy.
That only changes when US interest rates fall and “dollar yield loses its attractiveness,” which is not likely until the second half of 2026 or more likely 2027, he said.
The US dollar index (DXY) has gained about 5% over the past two months, according to TradingView.
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