$600 Billion in Paper Losses Mount for BTC Investors as Price Retreats to $66K
Nearly half of all Bitcoin in circulation is now trading at a loss at the $66,000 level, as subdued spot market activity continues to dampen investor confidence.
On Thursday, Bitcoin (BTC) changed hands at $66,450, representing a decline of 47% from its peak price of $126,000 that was achieved in October 2025. This steep drop has left numerous BTC investors grappling with substantial paper losses, highlighting the considerable risks that continue to confront Bitcoin market participants at present price levels.
Key takeaways:
- The 47% decline from Bitcoin's all-time high of $126,000 has resulted in approximately $600 billion worth of unrealized losses for holders.
- Visible demand and purchasing activity from investors in the United States continues to show deep contraction, pointing to wider market distribution patterns.
Nearly half of circulating Bitcoin supply now underwater
The BTC/USD pair is currently trading 24% beneath its yearly opening price of $87,500 following its negative close in 2025. This extended period of price weakness has resulted in a substantial amount of supply moving underwater.
With Bitcoin trading at $66,450 on Thursday, approximately 8.8 million BTC are currently being held at a loss, which translates to $598.7 billion in paper losses, accounting for more than 44% of the total circulating supply, based on data sourced from Glassnode.
According to Glassnode's analysis, the bear market experienced in 2022 offers a historical comparison, during which approximately 3 million BTC required redistribution before market conditions could begin recovering.
"Historically, resolving a supply overhang of this scale has required a meaningful redistribution of coins from loss-realizing holders to new buyers at lower prices."
The growing magnitude of these unrealized losses has weakened investor confidence, leading long-term holders (LTH) to capitulate through selling their holdings below their original acquisition costs.
The LTH realized loss metric, which tracks the cumulative dollar amount of Bitcoin sold at a loss by market participants who have maintained their BTC positions for longer than 155 days, has climbed to $200 million, "confirming active capitulation," according to Glassnode, which further noted:
"A meaningful cooldown toward levels below $25M per day would represent a more compelling signal of exhaustion in selling pressure, and a prerequisite for the base formation that historically precedes a sustainable bull market transition."
The current spot price of BTC has also fallen below the mean cost basis of US spot Bitcoin ETF investors, which stands at $83,408, indicating that these market participants are facing mounting financial pressure.
This risk-averse market sentiment is further evidenced in worldwide Bitcoin investment products, which experienced net outflows exceeding $194 million for the week concluding March 27.
Contraction in Bitcoin apparent demand shows no signs of easing
Since mid-December 2025, Bitcoin's apparent demand has remained in negative territory, as market participants continue adopting a risk-off approach in response to BTC's ongoing price deterioration.
The Bitcoin Apparent Demand metric from Capriole Investment indicates that demand for Bitcoin registers at -1,623 BTC on Thursday, demonstrating that sellers maintain market control.
The ongoing contraction visible in aggregate apparent demand signals continuous "selling from retail," as stated by CryptoQuant in its most recent Weekly Crypto report, which additionally observed:
"The sustained demand contraction, now persisting since late November 2025, confirms that the broader market remains in distribution."
At the same time, Bitcoin's Coinbase Premium Index, a metric that tracks the price differential for the BTC/USD trading pair between Coinbase and Binance, continues to register in negative territory.
"The persistent negative premium indicates that US investors have not yet re-entered the market at scale," stated CryptoQuant, which went on to note:
"This is consistent with the demand contraction seen across on-chain metrics."
As previously reported by Cointelegraph, Bitcoin price faces the possibility of reaching new lows in the near term as the US dollar continues to strengthen.