Bitcoin Holdings in Positive Territory Approach Historical Bear Market Thresholds
According to Cryptoquant analytics, approximately 8.2 million Bitcoin are currently held at unrealized losses, a figure that remains below the loss levels observed during the 2022 bear market cycle.
The proportion of Bitcoin holdings showing unrealized profits versus losses is now approaching thresholds characteristic of bear market conditions, a CryptoQuant analyst has indicated.
Approximately 11.2 million Bitcoin (BTC) are currently being held in profitable positions. During the prior bear market cycle, this figure bottomed out at 9 million BTC in profit, according to CryptoQuant analyst "Darkfost" in a statement released Thursday.
Data from CryptoQuant additionally reveals that roughly 8.2 million Bitcoin are currently held at a loss, with Glassnode analytics corroborating that these levels haven't been witnessed since the latter part of 2022.
"This is quite significant, considering that during the last bear market this figure reached about 10.6 million BTC," Darkfost said.
Market analysts have engaged in discussions regarding whether Bitcoin faces additional downward pressure this year as global turmoil intensifies. Bitcoin indicators displaying movement toward prior cycle minimums could indicate that a market floor is drawing nearer.
"This suggests that the market is reaching a notable level of undervaluation, comparable to the conditions observed during the previous bear market," the analyst added.
Analyst sees increasing market stress, not undervaluation
Conversely, Andri Fauzan Adziima, research lead at the Bitrue exchange, argued the data signals "increasing market stress, not immediate undervaluation."
Genuine capitulation bottoms experienced more severe declines, he communicated to Cointelegraph. During 2022, the supply held at a loss exceeded 50% while the supply showing profit stood at approximately 45% or below, with indicators including net unrealized profit/loss (NUPL) and market value to realized value ratio (MVRV) reaching "extremes."
"Current data points to early/mid-bear transition (potential structural bottom near $55,000), with more downside or consolidation likely before a full reset."
Available data additionally demonstrates that Bitcoin has dropped by approximately 52% from its all-time high during this cycle, considerably less than prior bear markets, which experienced 77% to 84% drawdowns from their cycle highs.
Strong dollar hampering recovery
Bitcoin author Timothy Peterson commented on X that Bitcoin "tends to struggle when the dollar is strong, and the Chinese yuan is weak."
He further explained that this phenomenon was attributable to constrained global liquidity, with elevated dollar yields drawing capital toward cash and bonds and risk-averse investor sentiment as China pursues policy easing.
That situation only reverses when US interest rates fall and "dollar yield loses its attractiveness," which is not likely until the second half of 2026 or more likely 2027, he said.
The US dollar index (DXY) has climbed approximately 5% throughout the past two months, according to TradingView.
