More than half of all Bitcoin in circulation is now held at an unrealized loss, a rare on-chain signal that has appeared near every major bear-market bottom in BTC history.
Glassnode data shows that Bitcoin supply in loss peaked near 10.5 million BTC as the price fell toward $61,300 on Thursday. Supply in profit dropped to about 9.8 million BTC, meaning underwater coins have overtaken profitable coins for the first time in the current cycle.
The crossover does not mean Bitcoin has already bottomed. It does show that the market has entered the kind of stress zone normally associated with late-stage bear phases. In previous cycles, similar conditions appeared around the 2015, 2019, March 2020 and 2022 lows, but the length of the pain varied sharply. Some periods lasted weeks. Others lasted months.
Bitcoin Tests Its 200-Week Line Again
The latest decline also pushed BTC into one of its most watched long-term support areas. Bitcoin touched the 200-week moving average near $61,300, a level that has historically been tested during major bear-market resets.
That level is now the first line traders are watching. A stronger break below $60,000 would shift attention toward the realized price near $54,000, which reflects the average on-chain acquisition cost of all circulating BTC. Bitcoin has traded below realized price during every major bear market, making that zone one of the cleaner downside markers if the selloff deepens.
Social chatter around Bitcoin has also centered on the same signal, with Bitcoin-focused accounts highlighting the 10.5 million BTC underwater figure and the 200-week moving average test. The market is now treating $61,000 to $60,000 as more than a round-number support zone. It is the line between a volatile retest and a deeper realized-price capitulation setup.
ETF Outflows Keep The Pressure On
The on-chain stress signal is flashing while institutional demand is weakening. U.S. spot Bitcoin ETFs are coming off a record 13-day outflow streak, with about $4.33 billion leaving the products between May 15 and June 3. That streak removed one of Bitcoin’s strongest demand channels just as leveraged positions were being flushed out.
The ETF bleed has become more important because traditional brokerage demand helped drive the last major BTC expansion. When those products are taking in capital, spot demand can absorb sell pressure. When they bleed for nearly three straight trading weeks, liquidity thins, dip buyers hesitate, and futures markets become more sensitive to forced selling.
Citi also framed the current weakness around demand rather than one-off selling. The bank argued that Bitcoin’s bigger problem is a lack of fresh investors, with ETF flows acting as one of the clearest gauges of adoption. That fits the current market structure: the issue is not only who sold, but whether enough new capital is arriving to absorb the coins.
Long-Term Models Show Deep Discount, Not Guaranteed Relief
Another fresh Bitcoin signal is coming from long-term valuation models. A separate CoinDesk market note said BTC has fallen near the lower boundary of its Power Law corridor, with the oscillator showing Bitcoin cheaper than roughly 95.6% of its historical readings relative to trend.
That is a constructive long-term data point, but it is not a timing tool. Deep discount zones can mark exhaustion, yet they can also persist while ETF flows stay negative, macro capital rotates elsewhere, and weak hands continue selling into rebounds.
Bitcoin’s setup is now split between historically rare bottom signals and still-deteriorating liquidity. More than half the supply underwater shows real capitulation pressure. The ETF streak shows institutional demand has not repaired yet. The next clean test is whether BTC can hold the $61,000 to $60,000 area and pull ETF flows back toward neutral before realized price near $54,000 becomes the market’s next major magnet.
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