A new on-chain data analysis reveals that Bitcoin market stress is increasing, with over 28% of the circulating supply currently held by holders keeping their Bitcoin at a loss. This means that nearly one-third of investors are “underwater” on their positions, reflecting growing tension, especially among recent buyers.
Although the figure sounds alarming, historical data suggests that during bull cycles, these loss levels have often marked local bottoms rather than major collapses. The market appears to have reached a “liquidity stress point” where sellers tend to become exhausted. However, prolonged emotional stress can transform a short-term rebound into a “liquidity exit,” where newer investors sell at their break-even point.
The market is entering a delicate balance between fear and patience. If sentiment fails and holders continue to de-risk, demand could erode. But if fear reaches an extreme and selling pressure runs out, these same levels of Bitcoin at a loss could form a durable bottom, setting the stage for the next accumulation phase.
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