Holders of approximately 9.4 million Bitcoin — representing roughly 47% of the total circulating supply — are currently sitting on unrealized losses, according to new findings from CEX.io Research. The report highlights that more than 30% of Bitcoin held by long-term investors, valued at around $304 billion, is now underwater. Analysts describe this as the highest such share since 2023, pointing to a notable deterioration in market confidence among committed holders.
The report states that long-term holders are selling at their deepest losses in three years, and that the speed of the reversal signals a sharp decline in conviction. Analysts noted a troubling divergence: while Bitcoin’s price has drifted slightly higher in recent weeks, the proportion of long-term holders sitting in profit has been quietly shrinking. This kind of disconnect between price movement and on-chain behavior has historically preceded significant downturns, according to the report.
Bitcoin was recently trading around $66,567, roughly flat over the prior 24 hours but down approximately 6% over the past week. The decline has been partly attributed to growing concerns over a potential escalation in the conflict involving Iran. The broader geopolitical uncertainty has added pressure to an already fragile market environment.
CEX.io’s Bitcoin Impact Index, a measure of holder stress levels as they relate to selling behavior, has moved to a “high impact” reading. This indicates significant stress among both retail Bitcoin holders and institutional capital. The firm draws comparisons to similar conditions observed in mid-2018 and mid-2022, both of which preceded price drops exceeding 25%. A comparable decline from current levels would push Bitcoin below $50,000 for the first time since February 2024, and would represent a drop of roughly 47% from its all-time high of $126,080 set in October.
The current setup, according to CEX.io, bears resemblance to conditions seen in late January, which preceded a steep fall in Bitcoin prices from the mid-$90,000s to the low $60,000s in early February. One key difference noted by analysts is that holders have not yet moved large quantities of Bitcoin to exchanges in preparation for selling. That restraint helped limit the severity of February’s downturn, and analysts suggest it may be doing the same now.
The report adds that if holders continue to refrain from rushing to exchanges, prices could stabilize rather than decline further. This cautious outlook aligns with recent commentary from asset manager VanEck, which flagged unusually strong demand for downside protection on Bitcoin. Earlier this year, CryptoQuant suggested that Bitcoin’s real bear market bottom would be closer to $55,000, while Standard Chartered forecast a drop to $50,000 before a recovery toward $100,000.
Originally reported by Decrypt.
