Bitcoin Supply In Loss Turns Upward—Early Bear Market Signal?

On-chain data shows the Bitcoin Supply in Loss indicator has witnessed a shift in direction that has often led into bearish phases in past cycles.

The indicator works by scanning through the transaction history of each token in circulation to determine the price at which it was last transacted on the network. If this previous transaction value for any coin was greater than the latest spot price, then the metric assumes that particular token to be underwater.

Now, here is a chart that shows the trend in the 365-day simple moving average (SMA) of the Bitcoin Supply in Loss over the cryptocurrency’s history:

As displayed in the above graph, the 365-day SMA Bitcoin Supply in Loss plummeted to the lowest point for the cycle back in October. This plunge came as the asset rallied to a new all-time high (ATH) beyond the $126,000 level.

Since the low, however, the indictor has witnessed a rapid climb, a consequence of the bearish momentum that BTC has faced following its ATH. So far, the indicator hasn’t risen to a significant level compared to past capitulation levels, but the change in direction has been solidifying itself.

Whether the recent reversal in the Supply in Loss is the beginning of something similar only remains to be seen. Earlier in this cycle, an upward turn in the indicator ended up only being temporary, as the H1-2025 drawdown gave way to renewed bullish momentum rather than a prolonged bear phase.

At the time of writing, Bitcoin is trading around $89,000, up over 1% in the last 24 hours.