The price is hovering around $61,000, roughly 50% below its all-time highs, after a recent break of its 200-week moving average.

For the first time since late 2022, more than 50% of trading coins are below their purchase price, notes Vetle Lunde of K33 Research. A month ago, this figure was only 30%.

This is the latest sign of stress in a market that has been stalling for months. Bitcoin and many other tokens have been selling off since October. Last week, the world's largest coin fell to its lowest since 2024, erasing all the gains made during Trump's crypto-friendly presidency.

The new wave of declines began after Strategy Inc. announced the sale of a portion of its tokens, alarming traders given the company's importance to the crypto ecosystem. The outflow of funds from exchange-traded funds into Bitcoin accelerated, and volatility jumped to a three-month high.

The significance of these events extends beyond paper losses. With more than half of the supply in the red, the market begins to bear the weight of millions of disappointed holders who bought coins during last year's enthusiasm. They often use rallies to exit positions rather than to build on them, creating hidden selling pressure. A prolonged decline risks undermining one of Bitcoin's most valuable attributes—its reputation as an asset that reliably rewards patience.

On the surface, events in the crypto space appear constructive: the Trump administration is supportive of cryptocurrencies and is pushing for regulations that bring products closer to the mainstream. However, the reality is grimmer: over the past month, U.S. Bitcoin ETFs have lost approximately $5.5 billion in outflows. Total volumes on centralized exchanges fell to $4 trillion—the second consecutive month at a nearly two-year low.

Nevertheless, K33's Lunde sees a glimmer of hope. Historically, half of Bitcoin trading at a loss has only been observed near major bearish bottoms, "when selling pressure from profitable holders increasingly dwindles." In the past, the coin typically bottomed within a few weeks of crossing this level, although it has occasionally experienced an additional "final wave" of decline.

"It's not a guarantee, but the configuration suggests that the downside potential may be limited relative to the upside potential in the coming year, strengthening the case for bullish sentiment," he said.