▲ Bitcoin (BTC)

An analysis suggests that the cryptocurrency market has entered a full-scale deepening bearish phase, as more than 43% of the total Bitcoin (BTC) supply is currently held at a loss.

According to a March 9 report by cryptocurrency-focused outlet NewsBTC, 43.4% of Bitcoin’s circulating supply is trading below its purchase price, a characteristic typical of bear markets. Citing data from on-chain analytics firm Glassnode, the report noted that this proportion of unrealized losses is similar to levels observed during the early stages of downturns in 2018 and 2022. A significant portion of investors’ holdings are effectively “underwater,” increasing the likelihood of further downward pressure on the market.

Historically, before Bitcoin forms a bottom and rebounds, more than 50% of the supply tends to fall into a loss position. The current 43.4% suggests the market may be approaching a bottom, but experts agree that it has not yet reached a true capitulation phase. They warn that market pain could continue until the share of underwater supply hits a critical threshold, during which a large volume of short-term holdings may be liquidated.

As the recent price decline persists, newly injected capital has also been pushed into loss territory. This phenomenon dampens buying demand and leads to heightened volatility, where even small amounts of selling can trigger sharp price swings. Experts assess that current indicators likely place the market in the middle stage of a prolonged bearish trend, adding that a transfer of holdings from long-term investors or strong macroeconomic tailwinds would be necessary for the market to regain momentum.

With the cryptocurrency market navigating extreme fear and uncertainty, whether Bitcoin can absorb and unwind its unrealized losses is expected to be a key determinant of future price movements. Investors should remain cautious, as even temporary rebounds may be met with heavy selling from those trapped in loss positions. For now, a conservative approach focused on risk management and confirming downside support levels is advisable rather than aggressive buying.

Disclaimer: This article is for investment reference only and the publisher is not responsible for any investment losses incurred based on this information. The content should be interpreted for informational purposes only.

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