On-chain data shows the percentage of the Bitcoin supply in loss has surged to almost 50% now as the crypto’s price tumbles below $20k.
49.94% of the Total Bitcoin Supply Are Now Holding Some Losses
An analyst pointed out in CryptoQuant that the supply has fallen to almost half of its original $20k level.
The “percent supply in loss” is an indicator that measures what part of the total Bitcoin supply is currently in the red.
You can use the metric system to determine the last price of every coin by looking at its transfer history.
A coin that was sold at a higher price than its current BTC value is considered to be in a loss.
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If the price at which the coin was purchased last is lower than it is now, then profit will be made. The former types of coins are not included in the supply in losses.
Here’s a chart showing the decline in Bitcoin supply over the past few years.
It seems like the indicator's value has increased in recent months. Source: CryptoQuant| Source: CryptoQuant
You can see that Bitcoin’s supply is decreasing in value as the price plummets.
This latest decline in cryptocurrency’s price, below its $20k mark, has forced a further decrease in supply.
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The total supply of red coins now stands at nearly half the level. The coin’s bottoms have always been in periods of indicator value between 50-60%.
This makes it a good place to accumulate Bitcoin. The supply of loss is still at 50%, so a true bottom could be elusive.
The value of this metric was less than 55% at the bottom of each previous downturn. The potential for further downtrends in crypto could be possible if a similar pattern is observed now.
BTC price
At the time of writing, Bitcoin’s price floats around $19.2k, down 33% in the last seven days. In the past month, crypto lost 37%.
Below is a chart showing the change in coin price over the past five days.
Cryptocurrency seems to be losing value over the last day. Source: TradingView - BTCUSD| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts