Bitcoin prices have fallen sharply in recent days, but despite the negative sentiment that has gripped the market, the latest on-chain data suggests that the world’s largest digital asset may be nearing a bottom before beginning a new recovery phase.
At the time of writing, Bitcoin is at $63,583, down 0.05% since it opened early Monday in Asian trading.
According to the latest analysis, the number of Bitcoins currently in loss has surpassed the critical 10 million BTC mark.
The metric known as ‘Supply In Loss’ measures the number of Bitcoins that have been bought at a price higher than the current market price.
This means that coin owners are suffering losses on paper and have not yet sold their holdings.
Currently, around 10.46 million Bitcoins are reported to be in loss, a figure that has caught the attention of investors and market analysts.
Historically, similar situations have occurred at the end of 2018 and 2022.
In both periods, Bitcoin finally managed to form a price base before starting a strong rise in the next cycle.
This phenomenon is often considered a positive sign because as more investors are in losses, selling pressure usually begins to subside.
Many investors choose to continue holding their assets rather than selling at low prices, thus reducing the supply available in the market.
This situation has the potential to help stabilize prices and pave the way for the emergence of new upward momentum.
However, some analysts warn that the risk of further declines cannot be completely ruled out.
The current circulating supply of Bitcoin is much larger than in previous market cycles, which may cause the number of Bitcoins in losses to increase even higher before the trend reversal actually occurs.
For now, historical data suggests that Bitcoin may be approaching the price base formation zone.
If the past pattern repeats itself, the crypto market has the potential to see a resurgence of bullish sentiment in the coming period.
