Bitcoin on-chain data shows that more coins are now held at a loss than at a profit for the first time since the previous bear market, flashing a bearish signal and potentially marking a capitulation phase.
The article reports that more bitcoin is held at a loss than at a profit, indicating a majority of BTC holders are underwater. This widespread loss-making suggests bearish market conditions and potential capitulation, though it can also be a contrarian bottom signal if extreme.
It signals that the majority of market participants are at a loss, which can increase selling pressure if holders decide to cut losses. Short-term, it may lead to further declines as sentiment remains negative.
While extreme loss-making has marked previous bottoms, it's not a precise timing indicator. A bottom requires additional confirmation such as a decrease in selling volume and a shift in longer-term holder accumulation.
During past bear markets, the percentage of loss-making coins often peaked above 70%, so the current flip could suggest the market is in a deepening downtrend but not yet at historically extreme levels.
The percentage of bitcoin held at a loss has fallen below 50%, indicating the majority of market participants are now underwater on their positions. This on-chain metric often coincides with late-stage bear markets and can signal capitulation, though it may also precede a bottom if sellers are exhausted. The flip underscores prolonged downward pressure on bitcoin prices and deteriorating holder sentiment.
It means that the majority of Bitcoin investors are underwater on their positions, which is often a bearish signal. This metric can indicate widespread market capitulation and may precede a market bottom if sellers are exhausted.
Not necessarily; while extreme loss-making can mark a bottom, it doesn't guarantee an immediate reversal. Investors should look for confirming signals such as price stabilization and improving on-chain activity.
Profitability is typically measured by comparing the current price to the realized price, or cost basis, of coins. When the market price falls below this average cost basis, more coins become loss-making.