Bitcoin is showing signs of a potential market bottom as metrics approach levels last seen in the previous bear market. Data shows approximately 11.2 million BTC are currently held in profit, while 8.2 million are held at a loss, nearing historic extremes. Analysts are divided on whether this signals undervaluation or simply increasing market stress, with a strong U.S. dollar cited as a headwind for recovery.
Bitcoin’s supply in profit is nearing levels typical of a bear market. About 11.2 million Bitcoin are currently in profit compared to 9 million at the last bear market’s lowest point.
Data from Glassnode confirms around 8.2 million Bitcoin are held at a loss. This level has not been seen since late 2022.
The analyst known as Darkfost stated this 8.2 million figure is significant. It approached 10.6 million Bitcoin at a loss during the previous bear market.
This movement toward previous cycle lows could suggest a market bottom is nearing. “This suggests that the market is reaching a notable level of undervaluation, comparable to the conditions observed during the previous bear market,” the analyst added.
However, Andri Fauzan Adziima, research lead at the Bitrue exchange, argued the data signals increasing market stress. He noted true capitulation in 2022 saw over 50% of supply at a loss and other metrics at extremes.
“Current data points to early/mid-bear transition (potential structural bottom near $55,000), with more downside or consolidation likely before a full reset,” he stated. Bitcoin’s 52% decline from its all-time high this cycle is also less severe than the 77-84% drawdowns of past bear markets.
Bitcoin author Timothy Peterson commented that Bitcoin tends to struggle when the dollar is strong and the Chinese yuan is weak. He linked this to tighter global liquidity and higher U.S. dollar yields attracting capital.
Peterson said this dynamic is unlikely to change until U.S. interest rates fall in the second half of 2026 or 2027. The U.S. dollar index has gained about 5% over the past two months.
