42% of Bitcoin Supply Now Trading at a Loss

Over 8 million BTC — nearly half the entire circulating supply — is currently underwater.

This is one of the most severe unrealized loss readings in recent cycle history, driven largely by Short-Term Holders who bought near the highs.

Historically, such extreme levels have only appeared during deep capitulation phases:

• 2018 bear market bottom
• Late 2022 FTX collapse

Both times, this kind of widespread pain marked the final exhaustion of weak hands before major recoveries began.

The current environment suggests we are still in the process of shaking out leveraged and late buyers.