Bitcoin Flashes a ‘Warning Sign’ with Nearly Half of BTC Supply Suffering a Loss: Report

Owners are about 9.4 million Bitcoinor roughly 47% of total circulating supply, are sitting on unrealized or paper losses, according to New report from CEX.io Research.

This includes more than 30% of bitcoins held by long-term holders, or $304 billion worth of the largest cryptocurrency assets, which are now underwater — the highest share since 2023, according to the report.

“Long-term bondholders are now selling at their deepest losses in three years, and the speed of the reversal indicates a sharp deterioration in confidence,” the report said.

“The broader context makes this even more worrying,” the analysts added. “The price of Bitcoin has risen slightly in recent weeks, but the share of long-term holders taking profits has quietly shrunk at the same time.”

Bitcoin has roughly stabilized over the past 24 hours, most recently trading around $66,567, but has fallen nearly 6% in the last week of trading as Possibility of escalation of the conflict in Iran It has grown.

The shift in circumstances has pushed Bitcoin into a fragile place, according to the Verge. CEX.io. The company’s Bitcoin Impact Index, which measures Bitcoin holders and their stress levels regarding selling, flashed to “significant impact.” In other words, there is a lot of pressure on Bitcoin holders and institutional capital.

“This type of divergence between price action and cross-chain conviction has historically been a warning sign,” the report says. “For example, similar moves occurred in mid-2018 and mid-2022 before prices fell more than 25%.”

Another 25% decline would push Bitcoin below $50,000 for the first time since February 2024. As of this writing, Bitcoin is currently about 47% below its all-time high of $126,080 set in October.

the CEX.io Research suggests that the new setting resembles the late January period, which preceded the sharp decline in Bitcoin prices from the mid-$90,000s to the low-$60,000s in early February.

“The difference this time is that bitcoin holders have not yet rushed to exchanges to sell. That prevented the worst moments in February from getting worse, and they are doing the same now,” she said, adding that if the currency continues to hold, prices may stabilize instead of falling further.

the The cautious analysis is similar to one VanEck recently sharedindicating “unusually strong demand” for downside protection on Bitcoin. Earlier this year, CryptoQuant suggested this BTC’s true bear market bottom The price will be closer to $55,000, instead Standard Chartered Bank said it would reach $50,000 Before it rebounded towards $100,000.