Bitcoin Supply in Loss Climbs Above 5.6 Million: Why a BTC Rebound Could Be Next

TLDR:

• Over 5.6 million Bitcoin are now held below cost, echoing 2024’s market bottom patterns.
• CryptoQuant data shows “supply in loss” climbing to 28–33% of total BTC supply.
• Analysts say spikes in loss supply often precede accumulation and rebound phases.
• October’s surge in underwater BTC signals heightened fear and potential market stabilization.

More than 5 million Bitcoin are once again in loss, raising questions about whether the market is nearing another local bottom. 

Data from on-chain analytics firm CryptoQuant shows that as of November 5, about 5.64 million BTC were trading below their holders’ cost basis. The metric, known as “supply in loss,” surged sharply following Bitcoin’s recent drop to the $98,966 level. 

Historical data suggests that similar conditions in mid-2024 marked key reversal points in the market.

On-Chain Data Signals Capitulation Phase

According to @_onchain via CryptoQuant, the last time Bitcoin’s supply in loss exceeded five million was April 7, when the asset fell to $74,508. That period marked the year’s all-time low and preceded a strong recovery in the following weeks. 

Analysts view the current level of unrealized losses, spanning roughly 28% to 33% of total supply, as comparable to those previous troughs.

CryptosRus noted that the metric often reflects fear and capitulation among holders. When large portions of Bitcoin are underwater, weaker investors tend to sell, creating conditions for stronger hands to accumulate. 

The post added that similar “yellow-highlight” spikes on the chart historically coincided with market stabilization phases.

On-chain readings further show that supply in loss reached its latest peak amid volatility in late October. CryptoQuant data indicates a rapid rise from below five million to over 5.6 million coins, signaling intensified pressure from short-term traders. 

However, the same pattern last appeared during 2024’s correction before a sustained uptrend followed.

Comparing Current Conditions to 2024 Bottom Levels

The resemblance between the current setup and last year’s capitulation event is drawing attention among analysts. 

@_onchain referenced the chart’s “areas 3, 4, and 5,” which tracked 2024’s bottoming sequence before a rebound. Those instances also showed supply in loss clustering around 30% of total circulating BTC.

As Bitcoin’s price consolidates near $99,000, the data suggests a reset phase rather than structural weakness. CryptoQuant’s metrics imply that bearish sentiment may be peaking, historically a prelude to renewed accumulation. 

While not a guarantee of reversal, such patterns have repeatedly preceded upward shifts in market cycles.

Several analysts, including those cited by CryptosRus, interpret the recent surge in loss supply as part of a cleansing stage for overleveraged positions. They note that similar washouts in prior cycles flushed out short-term speculators before stronger rallies resumed into subsequent quarters.

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