- Over half of Bitcoin supply is underwater, echoing conditions seen in past deep crypto selloffs.
- Spot and futures demand for Bitcoin weakens sharply, hitting some of the lowest levels since 2019.
- Mixed signals emerge as capitulation signs clash with fading demand across the crypto market.
More than half of Bitcoin’s circulating supply is now being held at a loss, a level that has previously appeared during some of the cryptocurrency market’s deepest downturns.
According to CryptoQuant analyst G a a h, Bitcoin’s 7-day moving average Supply in Loss indicator climbed above 50% for the first time since November 2022. During that period, Bitcoin fell below $20,000 before beginning a recovery that lasted into the following year.
The latest data comes as Bitcoin trades below recent highs and demand across the broader crypto market shows signs of slowing. The return of the indicator has drawn attention from traders looking for clues about where the market may be headed next.
Historic Capitulation Signal Returns
G a a h said Bitcoin’s Supply in Loss indicator has historically aligned with major market turning points. According to the analyst, periods when more than half of the cryptocurrency’s circulating supply is held at a loss have often occurred during broad market downturns.
The reading above 50% indicates that a large share of Bitcoin holders are currently holding the asset below their purchase price. While such conditions have previously appeared near market lows, G a a h noted that the indicator alone does not confirm that a recovery is imminent.
G a a h’s chart further shows that readings below 10% have historically coincided with market peaks. During those periods, most Bitcoin holders remained in profit, showing stronger market conditions and higher investor confidence.
Related: Bitcoin Experienced Its Worst Week Since FTX Collapse: Threatens Further Decline
Demand Contraction Raises Caution
While the supply-in-loss indicator points to mounting pressure in the market, another CryptoQuant metric suggests Bitcoin demand remains weak.
CryptoQuant analyst MorenoDV_ said the 30-day growth in combined spot and perpetual futures demand has fallen to around negative 650,000 BTC, one of the lowest readings recorded since 2019. According to the analyst, the market has reached comparable levels only three times over that period.
Market Struggles After Failed Rebound
The weakness in demand was reflected in cryptocurrency prices on June 9. Bitcoin failed to hold above the $63,000 level and fell to $61,612. Other major cryptocurrencies, including Ethereum, XRP, Solana, BNB, HYPE, and Dogecoin, also traded lower.
Market data shows Bitcoin declined 4% over the past 24 hours and more than 10% over the previous seven days. Ethereum was down 16.3% during the week, while Solana posted a weekly loss of 17.6%.
MorenoDV_ said current market conditions resemble the early stages of a broader correction rather than a confirmed bottom. According to the analyst, the market could experience increased volatility and a period of subdued trading activity before a clearer trend emerges.
Related: Bitcoin Weakens as Gap Between Crypto and Equities Widens
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