BTC is down about 50% from the ATH, with LTH profit 74% down as supply loss hits 50% amid multi-month sell-off.
Long-term Bitcoin holders currently hold an average profit of around 74%, although this margin continues to decline as the cryptocurrency’s price approaches its cost basis, according to CryptoQuant analyst Darkfost.
The analyst noted that historical bear market cycles have been characterized by prices falling below long-term holding cost, triggering capitulation phases marked by realized losses of around 20%. Long-term holders are defined as investors known to be less sensitive to short-term price fluctuations, Darkfost said.
Market recovery and entry into bull phase have historically only occurred after such capitulation events, according to the analysis.
Glassnode reported that the 90-day moving average of the realized profit/loss ratio has fallen below 1, confirming a transition to an excess loss realization regime. The blockchain analytics firm said these bearish conditions have historically persisted for at least six months before liquidity returns to the markets.
Analyst James Check reported that Bitcoin recorded nearly five consecutive red monthly candles following the biggest volatility spike of the current cycle. Check observed that one-week realized volatility exceeded 150%, a level typically associated with capitulation events, and the weekly RSI reached one of the most oversold readings in Bitcoin history. According to Check’s analysis, a significant amount of Bitcoin has migrated to new holders in a high price range this year.
Losing Bitcoin supply reached 10 million coins, the fourth highest figure on record, analyst James Van Straten reported. Van Straten noted that the circulating supply will reach 20 million Bitcoins next week, 50% of which will be held at a loss. Historical trends suggest that such levels of capital destruction are sufficient to cause a bear market bottom, according to Van Straten.
Bitcoin saw a slight price rebound in early Asian trading hours, although bearish sentiment remains dominant in the market. The price movement has formed another lower high while a key support level continues to hold, according to technical analysis.