There's a specific on-chain crossover that happened earlier this month that I think deserves more attention than the single-day headlines it got. Glassnode data showed roughly 10.5 million Bitcoin sitting underwater — held at an unrealized loss — compared to about 9.8 million BTC still in profit. Total circulating supply is around 20 million BTC, so that means more than half of every coin in existence is currently worth less to its holder than what they paid for it. Bitcoin touched its 200-week moving average, sitting around $61,300, in the same stretch — a level that's marked a major support zone in literally every prior bear market.
I want to walk through why analysts treat this specific combination as meaningful, and also be honest about the part that makes it less useful as a precise timing tool than people often want it to be.
Why "More Coins Underwater" Is Actually a Bottoming Signal, Not Just Bad News
This sounds backwards at first. More coins at a loss should mean things are worse, right? The reasoning analysts use is almost the opposite. When supply-in-loss crosses above supply-in-profit, it typically means the market has worked through a meaningful chunk of the "weak hands" — holders who bought near the top and are now being forced, by price or by psychology, to either sell at a loss or hold through real pain. Historically, that crossover has shown up specifically during major cycle lows: the 2015 bear market, 2019, the COVID crash in March 2020, and the 2022 bear bottom following Luna and FTX. In each case, the imbalance eventually resolved itself as sellers exhausted their willingness to keep realizing losses, and price stabilized from there.
There's a related metric worth mentioning here, called SOPR — spent output profit ratio, which measures whether coins being moved on-chain right now are being sold at a profit or a loss on average. Since mid-January 2026, Bitcoin's SOPR has hovered at or below 1.0, meaning sellers have been taking losses on aggregate for months, not days. That's the textbook definition of what on-chain analysts call capitulation: the point where people who can't tolerate further drawdown finally exit, even at a loss, transferring their coins to someone else at a lower price.
The Part That Makes This Genuinely Different From a Simple "Buy Signal"
Here's where I think a lot of coverage of this kind of data oversells the certainty. The supply-in-loss crossover has historically aligned with bear market bottoms, but the actual duration of that condition has varied enormously across cycles. In 2015, supply-in-loss and supply-in-profit sat near equilibrium for almost a full year before the market actually recovered. In 2019, it lasted roughly six months. The COVID crash resolved in about a month. The 2022 bear market held this condition for around six months. That's not a tight, predictable window — it's a range from one month to twelve, and there's no reliable way to know in advance which version of history this cycle is going to follow.
So when someone tells you "this metric has called every bottom," that's technically true and also kind of beside the point, because it doesn't tell you whether you're one week or eleven months away from the bottom it eventually marks.
Who's Actually Selling Right Now Matters Too
Compass Point analyst Ed Engel has added a specific, more granular detail to this story: long-term holders, who had stayed largely inactive between February and April, have now rejoined the selling. Engel pegs that recent long-term holder selling at roughly $2.4 billion. More specifically, he's flagged that 26% of all Bitcoin sold over a recent 30-day stretch came from investors who originally bought above $90,000 — what he calls "top-buyer capitulation." His framing is that this kind of capitulation from people who bought near the top is a common feature late in bear markets, not early in them, which casts the recent pain as more consistent with exhaustion than with a fresh leg of a larger decline.
That's a meaningfully different read than "Bitcoin demand is structurally broken." Julio Moreno's data adds another layer: overall Bitcoin demand, both speculative and spot, has been contracting at a pace of roughly 232,000 BTC per month, and he's argued the current correction is mostly about Bitcoin-specific demand conditions rather than a broader stock, oil, or macro story — which actually contradicts some of the "it's all rates and geopolitics" framing that's dominated other coverage this year.
The Institutional Voices Pushing Back on the Doom Framing
It's worth noting that not everyone watching this is framing it as a crisis. Bernstein analysts have maintained that Bitcoin's long-term store-of-value thesis "remains unchanged," even while acknowledging that net inflows into spot ETFs and corporate treasuries have slowed sharply to around $12 billion in 2026, down from roughly $60 billion in 2025. Their specific point, which I think is underappreciated, is that the bulk of recent selling pressure has come from corporate treasury companies liquidating positions, not from ETF holders themselves — spot ETFs have only recorded about $2.6 billion in net outflows year-to-date, a far smaller number than the treasury-driven selling. Bernstein has kept a $150,000 price target for Bitcoin in 2026 and has described this stretch as featuring the "weakest bear case" in Bitcoin's history, on the argument that growing bank and institutional adoption genuinely separates this downturn from prior crypto winters.
What I'd Actually Take From All This
I think the honest synthesis is that the on-chain data is showing real, historically meaningful signs of capitulation — the supply-in-loss crossover, sustained sub-1.0 SOPR, top-buyer selling exhaustion — without any of it telling you precisely when this resolves. The 200-week moving average holding as support at $61,300 is a genuinely notable technical fact, given it's held in every prior cycle, but "held in every prior cycle" and "will definitely hold this time" are different claims, and conflating them is exactly the kind of overconfidence that on-chain Twitter is prone to. What's measurable right now is that the market has done real work clearing out forced and exhausted sellers. Whether that work is mostly finished or only partway through is something the data itself, by its own historical track record, simply can't answer with precision.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile and price predictions are speculative. Always do your own research (DYOR) before making any investment decisions.
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