Bitcoin's profitability metrics continue deteriorating, even as long-term holders begin absorbing distressed supply.
Bitcoin’s recent decline has pushed a growing share of holders underwater, increasing stress across the network. Supply in Loss has now climbed to 10.46 million BTC, marking the first time this cycle that underwater coins have exceeded Supply in Profit.fell toward the $60,000-$62,000 range, market profitability compressed sharply and unrealized losses expanded across multiple holder cohorts.
Yet this is also where the signal becomes interesting. Previous cycle bottoms formed when more than 10 million BTC sat at a loss. The reason is simple. Investors become less willing to sell after absorbing large drawdowns, causing sell-side pressure to gradually thin out.
If buyers begin absorbing that supply, Bitcoin could move closer to a bottoming phase. If not, deeper capitulation may still lie ahead. Bitcoin’s selloff has pushed the Market Value to Realized Value Ratio down to 1.1, leaving the market only slightly above its aggregate cost basis. In practical terms, most of the speculative premium that built up during the rally has already been erased.
As prices slipped toward the $60,000-$62,000 range, profitability across the network tightened and the market moved closer to levels that historically tested investor conviction. What’s notable is where this level sits in Bitcoin’s history. A further decline toward the low $50,000s would likely push MVRV toward 1.0, a level that has rarely appeared outside major cycle lows. In other words, Bitcoin is no longer expensive.
The question remains whether buyers are ready to step in before full capitulation takes hold. Long-Term Holder Net Position Change has recently turned positive, signaling a shift in Bitcoin’s ownership structure. Recent data shows this cohort absorbing roughly 30,000-35,000 BTC over a 30-day period after months of mixed positioning. The change suggests some investors are beginning to increase exposure despite continued market uncertainty.
Historically, sustained accumulation by long-term holders has often coincided with periods when supply gradually moved away from speculative participants. However, the current pace remains measured rather than aggressive. For now, the data points to improving conviction beneath the surface, though broader market participation remains subdued. Bitcoin now has 10.46 million coins underwater, pushing valuation metrics toward levels historically associated with major cycle bottoms.
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