Bitcoin’s on-chain indicators are moving into territory that has often appeared near major market bottoms, as a large share of the network’s circulating supply remains held at a loss after a sharp decline from last year’s record high.
Research from K33 Research shows that about 50% of Bitcoin’s circulating supply has been held at a loss for nearly 50 days. In previous bear market cycles, similar conditions were followed by long-term price recoveries after the market took between 13 and 101 days to form a durable bottom once that 50% loss threshold was reached.
Bitcoin traded near $63,485 on July 17, 2026, down sharply from its record high of $126,198 in October 2025. The size of that decline has brought several on-chain valuation measures closer to levels historically associated with late-stage bear markets, though analysts caution that such signals do not guarantee an immediate reversal.
K33’s data shows that Bitcoin crossed the 50% supply-in-loss threshold on June 5. That means the current cycle has spent 42 days inside the historical bottom-formation window. Compared with previous cycles, that makes the current stretch the second-longest period after the threshold was reached before a potential market floor.
In 2014, Bitcoin took 101 days after the 50% loss mark to reach its cycle bottom. In 2018, the same process took 23 days. In 2022, it took 13 days. The current reading does not match the prolonged stress seen in 2014, but it has already exceeded the time frames recorded in the 2018 and 2022 bear markets.
The figures suggest Bitcoin may be entering a more mature capitulation phase, when a large portion of traders who bought during the previous rally are holding positions below their cost basis. Historically, that condition has reduced some speculative excess from the market, but it can also leave prices vulnerable if holders continue to sell during periods of weak liquidity.
Why the supply-in-loss metric matters
The supply-in-loss metric compares the current Bitcoin price with the price at which coins last moved on-chain. If a coin last moved at a higher price than the current market price, it is counted as being held at a loss. When the percentage of supply in loss rises sharply, it usually means the market has moved deep into a downturn.
A 50% reading is significant because it indicates that half of Bitcoin’s circulating supply is priced below the last recorded on-chain acquisition level. That does not mean every holder is actively losing money, because some coins may have moved between wallets controlled by the same owner. Still, the measure is widely followed because it offers a broad view of market stress.
During bull markets, the share of supply in loss usually remains low because rising prices place most holders in profit. During severe drawdowns, the share rises as late-cycle buyers fall below their purchase levels. When the metric remains elevated for weeks, it can show that the market is working through a period of loss realization and position adjustment.
The current reading points to a market that has already absorbed a major repricing. The drop from more than $126,000 to the low $60,000 zone has pushed many recent buyers underwater. That often creates a slower, more selective trading environment, with fewer traders willing to chase rallies and more attention placed on support levels, liquidity, and macro conditions.
However, a high share of supply in loss is not automatically bullish. In some cases, it can precede further weakness if holders capitulate. The key question is whether the distressed supply has already changed hands from weaker participants to longer-term holders, or whether additional selling pressure remains.
Historical comparisons put the current cycle in focus
The comparison with earlier cycles is one of the main reasons the latest on-chain data has attracted attention. K33’s historical framework shows that once half of Bitcoin’s circulating supply moved into loss, the market bottom followed within a defined period in the past three major bear markets.
The longest wait came in the 2014 downturn, when Bitcoin needed 101 days after the 50% supply-in-loss threshold before reaching its floor. That cycle was marked by a long unwinding after the first major retail-driven Bitcoin boom and a collapse in confidence following major infrastructure failures in the sector.
The 2018 bear market moved faster. Bitcoin reached its bottom 23 days after the 50% loss threshold was crossed. That downturn followed the 2017 initial coin offering boom and ended after a final capitulation move that took Bitcoin below $4,000.
The 2022 cycle was shorter still by this measure. Bitcoin bottomed 13 days after the same threshold was reached, following a year defined by tightening monetary policy, widespread leverage reduction, and several high-profile failures across the digital-asset industry.
The current cycle, at 42 days after the June 5 threshold crossing, sits between the drawn-out 2014 bear market and the faster 2018 and 2022 declines. That places the market in a historically relevant zone, but not at a precise point where past data demands an immediate bottom.
For traders, the main takeaway is that Bitcoin is no longer in the early stage of a drawdown by this measure. The market has already spent several weeks in a condition that, in prior cycles, appeared closer to the end of major bearish phases than the beginning.
CryptoQuant data shows similar stress
Separate data from CryptoQuant also points to elevated stress across Bitcoin’s supply. As of July 17, about 46% of Bitcoin’s supply remained underwater, according to the firm’s figures. That is slightly below the 50% level cited in K33’s framework but still high enough to show broad losses across the network.
CryptoQuant had previously estimated that levels more commonly associated with market bottoms could remain about two months away if Bitcoin followed earlier patterns. That view suggests the market may still need additional time to complete its reset, even if the largest part of the price decline has already occurred.
The difference between the K33 and CryptoQuant readings reflects variations in calculation methods and data models. On-chain analytics often depend on assumptions about coin movement, realized prices, inactive supply, and wallet behavior. As a result, different firms can produce slightly different readings while still pointing to the same broad trend.
Both sets of data suggest that Bitcoin has entered a zone of heavy unrealized losses. The disagreement is mainly over timing. K33’s historical comparison implies that a bottom could be approaching within the range seen in previous cycles, while CryptoQuant’s prior assessment leaves room for a longer consolidation period.
What the RCV reading signals
CryptoQuant’s realized cap variance model, known as RCV, is also showing rare conditions. The model compares Bitcoin’s realized capitalization with its market capitalization. Realized capitalization values coins based on the price at which they last moved on-chain, while market capitalization uses the current market price.
The standardized RCV Z-score currently stands at -2.35, placing it in the lowest 6% of its recorded range. Readings that low have historically appeared when market prices were deeply compressed relative to network cost basis.
Periods when the RCV Z-score remained below -2.0 were recorded in 2015, 2018, and 2022. In those cases, Bitcoin delivered twelve-month returns of more than 75% after the signal appeared. The most extreme reading on record was -4.68 in November 2018, close to Bitcoin’s cycle bottom near $3,792.
The current RCV reading is not as extreme as the November 2018 level, but it is low enough to suggest that Bitcoin’s valuation has moved into a rare zone. These periods often indicate that the average cost basis across the network has compressed toward the market price, meaning the excess premium from the previous rally has largely been removed.
That compression can be important because it shows that the market is no longer being priced far above the level where many coins last changed hands. In past cycles, that has often marked the transition from speculative unwinding to accumulation and stabilization.
Still, the RCV model is not a timing tool on its own. It can identify historically cheap or stressed conditions, but it cannot determine whether Bitcoin will rebound immediately, trade sideways, or fall further before recovering.
Price action remains focused on the $60,000 area
Bitcoin’s current level near $63,485 keeps attention on the $60,000 region, which many traders view as an important psychological and technical area. The market has approached that zone after losing nearly half of its value from the October 2025 peak.
A sustained break below $60,000 could weaken sentiment and force a reassessment of downside risk. Conversely, repeated defense of that level could strengthen the case that the market is forming a base after months of selling.
The source data points to patience rather than aggressive positioning. When on-chain metrics enter bottom-like territory, prices can still remain volatile for several weeks. Previous cycles show that even after major stress signals appeared, Bitcoin did not always reverse immediately.
For that reason, traders are likely to watch whether the market can hold support while supply-in-loss readings remain elevated. A slow stabilization could indicate that sellers are losing control. A sharp move lower, however, would suggest that capitulation has not fully run its course.
Fund flows show tentative improvement
Beyond on-chain data, United States-listed Bitcoin exchange-traded funds showed a fresh sign of demand on July 16, drawing $79.15 million in net new cash after two difficult months of outflows. The inflow followed a period in which more than $8 billion had reportedly been withdrawn from the products.
Most of the latest inflow went into BlackRock’s Bitcoin trust, suggesting that traders and institutions using ETF products continue to favor the largest and most liquid vehicles. Concentration of inflows in one product can signal confidence in that fund’s structure, but it also shows that broader demand across the ETF market remains uneven.
The single-day inflow is not enough to confirm a lasting recovery in demand. Fund flows can reverse quickly, especially when Bitcoin remains volatile. Still, the shift is notable because ETF demand was one of the key drivers of the previous rally, and renewed inflows could help absorb available supply if they continue.
Some market watchers are looking for daily net inflows above $100 million on a consistent basis before treating ETF demand as a stronger signal of recovery. That level would suggest broader buying interest and could help offset supply from traders who are still underwater and looking to exit near break-even levels.
Bottom signals are strengthening, but confirmation is still needed
The latest on-chain data suggests Bitcoin is in a historically important phase. A large share of supply is held at a loss, the market is weeks into a bottom-formation window seen in previous cycles, and valuation models such as RCV are near rare stress levels.
These conditions support the view that Bitcoin may be closer to a long-term floor than it was earlier in the decline. They also suggest that much of the excess from the 2025 rally has already been cleared from the market.
But the evidence is not conclusive. Bitcoin’s prior cycles offer useful comparisons, yet each downturn has unfolded under different liquidity conditions, regulatory expectations, macroeconomic pressures, and levels of institutional participation. ETF flows, interest-rate expectations, and broader risk appetite are likely to influence whether the current setup turns into a durable recovery or an extended consolidation.
For now, the market appears to be in a recalibration phase. The data shows deep losses, compressed valuations, and early signs of renewed fund demand. What remains missing is sustained confirmation through stronger price action, continued ETF inflows, and a clear reduction in selling pressure near key support levels.
Wondering what this on-chain bottom could mean for future gains? Explore our insights in this analysis now.
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