After several days of sharp declines, Bitcoin’s price seems to have found some stability around the $60,000 mark. But recent on-chain data suggests the leading cryptocurrency might not stay down for long, with a potential bullish reversal on the horizon. Is a Bitcoin price bottom already forming?
In a post on X on June 7th, crypto analyst Ali Martinez pointed out that Bitcoin may have just hit a major bottom in this cycle. This assessment is based on changes in the “Bitcoin Supply In Loss” metric, which tracks how much Bitcoin in circulation was last moved at a price higher than the current market value.
This on-chain indicator shows how much pressure investors are under—or how deep their losses are—as they hold Bitcoin at an unrealized loss. When the Supply In Loss reaches near-record levels, it signals widespread fear and a possible shift in Bitcoin’s market dynamics. Martinez noted that in the past, Bitcoin formed major cycle bottoms when more than 10 million BTC were held at a loss.
According to Glassnode data highlighted by Martinez, Bitcoin has now crossed that threshold, with 10.46 million coins—more than half of the circulating supply—currently underwater. As seen in the chart, Bitcoin saw a bullish reversal in late 2018 when the supply in loss passed this 10 million mark. A similar pattern appeared around 2022.
Martinez explained: “I believe this is an important signal because selling pressure often fades as fewer investors are willing to realize losses, which increases the chance of a market bottom forming.” Based on historical patterns, there’s a strong chance that a price bottom is forming for Bitcoin at current levels.
However, one key factor to consider is that Bitcoin’s circulating supply was much lower in both of those periods—around 17.4 million in late 2018 and 19.2 million in late 2022. With a larger supply now, the Supply In Loss could edge higher this time, meaning Bitcoin’s price might still see further declines. This was the case in 2015, when the circulating supply was much lower and the Supply In Loss didn’t reach the 10 million threshold before a bullish reversal.
Bitcoin Price At A Glance
As of now, Bitcoin is trading at around $62,746, up 2.5% in the last 24 hours.
Featured image from iStock, chart from TradingView
Frequently Asked Questions
Here is a list of FAQs about the Bitcoin supply in loss crossing a critical threshold and the potential for a bullish reversal
BeginnerLevel Questions
Q What does Bitcoin supply in loss mean
A It refers to the total amount of Bitcoin that was bought at a higher price than its current market value In simple terms its the number of coins that are currently in the red or underwater
Q What does it mean when this number crosses a critical threshold
A It means the amount of Bitcoin held at a loss has reached a historically significant level In the past when this happened it often signaled that the market was at a bottom and a price reversal was coming soon
Q Does a high supply in loss automatically mean the price will go up
A No its not a guarantee Its a strong historical indicator that sellers are exhausted and the market is oversold It suggests a high probability of a reversal but external factors can still push prices down further
Q Why would a lot of people holding losses lead to a price increase
A Because those holders are unwilling to sell at a loss This reduces the number of coins available for sale When selling pressure drops and new buyers step in the price can rise more easily
Q Im new to Bitcoin Should I buy now because of this signal
A This is a positive signal but never invest based on one indicator Its best to do your own research consider your risk tolerance and ideally wait for confirmation
IntermediateLevel Questions
Q What is the specific critical threshold youre referring to
A Historically when the percentage of Bitcoin supply in loss reaches around 4050 of the total circulating supply it has marked major market bottoms Crossing that line often signals the end of a bear market phase
Q How is supply in loss calculated