14:05 ▪
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min read ▪ by
Bitcoin is going through a phase of tension that is increasingly resembling the beginning of a true bear market. Several on-chain indicators show that the market is approaching areas historically associated with cycle lows. Are we at the dawn of general capitulation… or simply mid-cycle correction?
In short
- Bitcoin supply falls to around 11.2 million BTC in profit, compared to 9 million on the previous bear market day.
- About 11.2 million BTC are still in profit, while 8.2 million are now in loss.
- For several analysts, the market is entering the zone of potential undervaluation.
Bitcoin is entering a critical zone
The latest data published by CryptoQuant shows an important change in the structure of the Bitcoin market. Today, about 11.2 million BTC are still circulating with unrealized profits, while 8.2 million are held at a loss. This level has not been seen since late 2022.
For analyst “Darkfost”, this shift is not accidental. It gradually brings the market closer to the typical configurations of a true bear market.
At the bottom of the previous cycle, supply in profit fell to around 9 million BTC, while supply in loss rose to 10.6 million. So the current market has not yet fully reached that level of pain, but it is clearly getting there.
This observation supports a more constructive reading: Bitcoin could enter a historically attractive valuation zone. In other words, the market is approaching a level where the excesses of the previous rally have been largely erased.
This signal deserves even more attention because it appears in a paradoxical context. Despite price weakness, US spot bitcoin ETFs attracted $1.32 billion in March. This suggests that some institutional investors are continuing to buy while the market doubts.
Why the real bottom may not be here yet
However, not everyone shares this optimistic view. For Andri Fauzan Adziim, head of research at Bitrue, the current data mostly reflects increasing pressure, not yet a complete capitulation.
His argument is simple: in real cycles, market distress usually becomes more extreme. By 2022, more than 50% of Bitcoin supply was in the red, while several valuation indicators reached much more severe levels of stress. We’re not there yet.
This nuance is important. It means the market may still go through a long consolidation phase or even a new bearish leg before a more durable recovery. Some analysts thus see a potential structural bottom around $55,000, not excluding further volatility.
Added to this is a major macro factor: the US dollar remains too strong. Historically, Bitcoin has often struggled to gain traction when global liquidity is down. The rise in the DXY, geopolitical uncertainty and expectations of high rates continue to attract capital to bonds and assets considered more defensive.
In short, it is not yet time to panic, but vigilance is necessary. The market is at a crossroads: data from the chains are sending real stress signals, but without reaching the historical extremes that are synonymous with a definitive bottom. The next Fed decision or an unexpected geopolitical signal could tip everything one way or another.
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I am passionate about Bitcoin, I love exploring the intricacies of blockchain and cryptocurrency and sharing my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER OF LIABILITY
The views, thoughts and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Before making any investment decision, do your own research.
