Bitcoin Supply in Profit Approaches Bear Market Levels

The proportion of Bitcoin supply in profit has declined to levels approaching those seen during the 2022 bear market. According to CryptoQuant analyst Darkfost, approximately 11.2 million Bitcoin are currently held at a profit, down from highs earlier in the cycle. Meanwhile, around 8.2 million Bitcoin are now held at a loss, with data confirming that this is the highest level of coins in loss since late 2022.

This suggests that the market may be reaching a notable level of undervaluation, similar to conditions during the previous bear market, Darkfost noted. However, not all analysts share this interpretation. Andri Fauzan Adziima, research lead at Bitrue exchange, argued that the data reflects 'increasing market stress' rather than immediate undervaluation.

Adziima also pointed out that true capitulation bottoms during 2022 involved more than 50% of supply in loss and profit ratios of 45% or lower. He suggested that current data points to an early or mid-bear transition, with a potential structural bottom near $55,000.

Bitcoin has declined approximately 52% from its all-time high this cycle, which is a smaller drawdown than the 77% to 84% drops recorded in previous bear markets. Some analysts have pointed out that this narrower decline may indicate structural maturity in the market.