Bitcoin Correction Pushes 580,000 BTC Into Loss Territory

Data shows the Bitcoin loss supply has risen to 8.33 million BTC as the recently-bought tokens have been pushed underwater by the drawdown.

Bitcoin Total Supply In Loss Has Shot Up Recently

In a new post on X, on-chain analytics firm Glassnode has talked about the latest trend in the Bitcoin Total Supply in Loss. This indicator measures, as its name suggests, the total amount of BTC that’s currently being held at some net unrealized loss.

The metric works by going through the transaction history of each token in circulation to determine the price at which it was last involved in a transfer on the blockchain. If this last selling value was more than the latest spot price for any token, then that particular coin is assumed to be held at a loss right now.

The Total Supply in Loss counts up all tokens fulfilling this condition. A counterpart indicator called the Total Supply in Profit takes care of the supply of the opposite type (that is, the coins with a cost basis lower than the current price).

Now, here is the chart shared by Glassnode that shows the trend in the 7-hour simple moving average (SMA) of the Bitcoin Total Supply in Loss over the last couple of years:

As displayed in the above graph, the Bitcoin Total Supply in Loss observed a decline during April and the first half of May as the cryptocurrency’s price enjoyed a recovery surge. At the asset’s top, the underwater supply shrank to levels below 7 million BTC. For comparison, the metric neared the 10 million mark following the crash in February.

Some of the supply that had escaped the loss territory, however, are now back in the red as a result of the price drawdown that Bitcoin has faced in the second half of May. The cryptocurrency’s retrace to $76,600 had already taken the Total Supply in Loss to a value of 7.75 million BTC, and now, the latest leg down to $73,000 has meant that the indicator has further gone up to 8.33 million BTC.

Naturally, the fact that a notable 580,000 BTC went into loss just because of this new drawdown implies that the $73,000 to $76,600 range saw the change of hands of a significant amount of supply. “This cohort adds to near-term sell pressure as holders reassess their positions into the correction,” noted the analytics firm.

Currently, the network is still in a better state than it was in February, but it only remains to be seen whether that will be the case going forward.

BTC Price

At the time of writing, Bitcoin is trading around $73,200, down more than 5% over the past week.