Nearly half of the bitcoin supply is now underwater, as market stress intensifies and key indicators flash warning signals.
Data from CEX.IO shows that close to 50% of circulating BTC is currently trading below its purchase price. The Bitcoin Impact Index — a gauge of financial stress across investor cohorts based on on-chain activity, ETF and derivatives flows, and liquidity conditions — jumped 13 points to 57.4 in the week ending March 28, marking its steepest rise since January.
With a maximum reading of 100, the index has now moved into the “high impact” zone, a range historically linked to broad selloffs and double-digit price declines, including those seen in 2018, 2022 and earlier this year.
Long-term holders, defined as wallets holding bitcoin for more than six months, have seen a sharp reversal. Just a week earlier, when BTC was trading above $70,000, these investors were still in profit. Now, more than 4.6 million BTC — roughly 30% of their holdings — are underwater, with realized losses last week reaching their highest level since 2023.
CEX.IO noted that this disconnect between price action and weakening on-chain conviction has historically preceded deeper corrections. Similar patterns emerged in mid-2018 and mid-2022, both of which were followed by declines exceeding 25%.
Short-term holders are also feeling the pressure. Around 47% of the total bitcoin supply is currently held at a loss, a level last seen during the market’s most stressed period in February.
Meanwhile, supportive capital flows have reversed. Stablecoin activity, which previously saw average daily inflows of $250 million, has shifted to outflows of approximately $292 million. At the same time, ETFs and miners have transitioned from accumulation to selling, adding to downside pressure.
Despite the mounting stress, one hallmark of full capitulation has yet to appear. On-chain data indicates that investors are not rushing to move bitcoin onto exchanges in large volumes — a behavior typically associated with panic selling.
