More Than Half of Bitcoin's Circulating Supply Is Now Underwater, K33 Flags Bear-Market Echoes
More than 50% of bitcoin's circulating supply is now sitting at an unrealized loss for the first time since the last bear market, according to K33 Research. The Norwegian crypto research firm estimates that over 10 million BTC were last moved or acquired at prices above the current market level.
K33's "supply in loss" indicator tracks the share of circulating coins last transferred at a price higher than spot. The shift follows a sharp pullback: bitcoin slid from a roughly 82,000 USD yearly peak to about 60,000 USD in around a month, a drop of roughly 28%. The price is currently changing hands near 61,000 USD. Four weeks ago, only about 30% of supply was underwater, implying a rise of roughly 20 percentage points.
K33 notes that in prior bear markets the 50% threshold tended to appear only late in the downturn, close to major lows. The reason is structural: a meaningful share of older coins rarely moves, whether due to lost keys or long-term holders with no intent to sell, meaning those coins never enter the "at a loss" bucket. Historically, the metric appears capped around 50% to 56%.
In the 2011, 2018 and 2022 bear markets, bitcoin bottomed within 31 days after first clearing 50% supply in loss. In each case, K33 says a final leg down of roughly 15% to 26% below the level at the initial threshold break preceded the low, as remaining holders still in profit capitulated and then also slipped into losses at lower prices. The subsequent 12-month returns were historically strong, ranging from 69% to 359%.
K33 cautions the pattern is not deterministic. During the 2014 cycle, bitcoin took 101 days to bottom after crossing the 50% mark and fell another 46% in the process, highlighting that the convergence of signals does not guarantee timing.
Institutional outflows have also intensified the move. K33 reports that 85,643 BTC exited exchange-traded bitcoin products over the past four weeks, the largest four-week outflow on record, averaging about 4,108 BTC per day from May 7 to June 8, 2026. The latest week alone saw outflows of 22,840 BTC.
Pressure has been especially visible in US-listed spot bitcoin ETFs, which sit within the broader ETP category. Starting May 20, 2026, investors withdrew a net total of more than 40,000 BTC across ten consecutive trading days. From May 30, another ten straight outflow days followed, totaling about 2.97 billion USD. The monthly net outflow of 2.43 billion USD was also the largest of 2026.
K33 points to potential catalysts including capital rotation toward high-conviction growth trades such as the planned SpaceX IPO, AI companies and megacap tech stocks. The firm also highlights Strategy (formerly MicroStrategy), which sold 32 BTC, marking its first bitcoin sale since 2022.
On technicals, K33 says several indicators have returned to levels associated with the last bear market. Bitcoin briefly dipped below the 200-week moving average during the selloff, with a maximum drawdown of 4.29% versus that four-year average. The daily RSI fell to its lowest since November 2018. The Fear & Greed Index dropped to 8 before edging back to 10. Open interest in CME bitcoin futures fell to a two-and-a-half-year low.
K33 also estimates that early June declines triggered around 1.5 billion USD of long liquidations as bitcoin broke below 62,000 USD, reaching its lowest level since October 2024. One offsetting signal: daily spot trading volume topped 5 billion USD for the first time since February 2026, activity that has historically appeared around potential turning points.
K33 maintains a base case in which 60,000 USD is the cycle low or at least an attractive long-term accumulation zone. The current drawdown is about 53% over roughly eight months; prior deeper declines lasted closer to a year and erased 76% to 85%. On that comparison, the ongoing selloff looks shorter and less severe.
Vetle Lunde, K33's head of research, argues the setup points to limited downside relative to potential upside over the next year, while stressing it is not a guarantee. Market maker Wintermute has taken a more cautious line, warning against declaring a bottom without clear evidence that inflows are returning. Under that view, the "supply in loss" signal alone is not sufficient as long as new capital does not re-enter the market in a measurable way.
