Bitcoin’s Bear Market Bottom Signal
The amount of bitcoin supply in loss has reached a key bear-market threshold, surpassing 10 million BTC, which is more than half of the total in circulation. This significant milestone has marked every bear market bottom in the past. With the price falling to as low as $61,300, more than half of all coins are currently held at an unrealized loss. The total circulating supply is roughly 20 million BTC. Historically, this transition has occurred only during deep bear-market conditions, often coinciding with major market bottoms.
The number of bitcoin held at a loss has exceeded the amount held in profit for the first time in the current market cycle. Supply in profit has declined to around 9.8 million BTC. Previous cycles show that this condition has varied in duration, making it difficult to estimate how long bitcoin could remain at depressed levels. For instance, during the 2015 bear market, this condition lasted almost a year, while in 2019 it lasted roughly six months.
Historical Context and Support Levels
Bitcoin has touched its 200-week moving average of around $61,300, a long-term trend indicator that has historically acted as a major support level during every bear market cycle. If bitcoin drops below the $60,000 level, the next major support zone is around $54,000, which corresponds to the realized price. The realized price represents the average acquisition cost of all bitcoin in circulation based on the price at which each coin last moved onchain. This is a crucial level to watch, as bitcoin has traded below its Realized Price during every major bear market.
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During the 2015 bear market, supply in loss and supply in profit remained near equilibrium for almost a year before the market recovered. In 2019, the period lasted roughly six months. The Covid-driven capitulation in March 2020 was shorter, lasting around one month, and the 2022 bear market saw this condition persist for about six months.
The takeaway is that while this signal has historically aligned with bear-market lows, the duration of these periods has varied significantly, making it difficult to estimate how long bitcoin could remain at depressed levels.
Adding to the significance of the recent decline, bitcoin touched its 200-week moving average of around $61,300. The measure is a long-term trend indicator that calculates bitcoin’s average price over the previous 200 weeks. It has historically acted as a major support level during every bear market cycle.
Should bitcoin drop below the psychologically important $60,000 level, the next major support zone is around $54,000, which corresponds to the realized price. The realized price represents the average acquisition cost of all bitcoin in circulation based on the price at which each coin last moved onchain. Bitcoin has traded below its Realized Price during every major bear market.
