Over Half of Bitcoin Supply Now Trading at a Loss, K33 Finds

K33 research shows more than 50% of Bitcoin's circulating supply is trading below holders' last-move price. More than 10 million BTC were last moved at prices higher than current levels. The milestone followed a roughly 28% selloff that took Bitcoin from about $82,000 to below $60,000 over the past month, and the share of coins trading below their last-move price rose from about 30% a month earlier to over 50%.

Vetle Lunde, K33's head of research, wrote that many older coins do not move because they are lost or held by owners who do not intend to sell. “A large percentage of old coins simply doesn't move, either due to coins being lost or due to coins being held by owners with no intention of ever selling, so they never fall into the ‘in loss' bucket,” he wrote. K33 said this behavior has historically capped the share of supply trading at a loss at roughly 50% to 56% in past bear markets.

K33 compared the current situation to previous cycles in 2011, 2018 and 2022. In those cases, the share of supply trading at a loss crossed 50% and market lows occurred within about one month, though each episode included a final leg that pushed prices roughly 15% to 26% below the level at the first 50% crossing. One year after the crossing in those episodes, Bitcoin returned between about 69% and 359%.

Other on-chain and market indicators moved during the recent drawdown. Bitcoin briefly touched and fell below its 200-week moving average. K33 calculated a maximum drawdown of 4.29% relative to the average BTCUSD price over the preceding four years. The cryptocurrency's relative strength index reached its lowest level since November 2018. Exchange-traded product flows averaged outflows of about 4,108 BTC per day between May 7 and June 8. The market-wide Fear & Greed Index fell to 8.

K33 also pointed to capital rotation toward high-conviction growth opportunities, including anticipation of a SpaceX initial public offering, AI-related companies and large-cap technology stocks, as a factor in recent selling. The firm reiterated a base-case view that the roughly $60,000 level represents either the cycle low or a “highly attractive long-term accumulation zone.” The report added that historical patterns do not guarantee future results.