Almost half of all bitcoins in circulation is now worth less than what it was purchased for, according to data from the Bitcoin Impact Index, which rose sharply last week as stress returned across all market segments.
The index, which measures the financial stress of bitcoin user cohorts based on on-chain behavior, ETF and derivatives activity, and liquidity flows, rose 13 points to 57.4 during the week ending March 28, its steepest rise since January, CEX.IO noted in a recent report.
That level, out of a range of up to 100, puts it squarely in what is considered the “high impact” zone that historically signals the types of widespread sell-offs that led to double-digit price declines in 2018, 2022 and earlier this year.
Long-term holders, wallets that have held BTC for more than six months, were selling at a profit just a week ago, when the cryptocurrency was trading above $70,000. Now, more than 4.6 million BTC of these wallets, or about 30% of their total holdings, are underwater, the report notes. Its realized losses last week were the worst since 2023.
“This type of divergence between price action and on-chain conviction has historically been a warning sign,” the firm wrote. “For example, similar moves occurred in mid-2018 and mid-2022 before prices fell by more than 25%.”
Short-term holders are not faring any better. The report found that 47% of the total bitcoin supply currently remains at a loss, levels not seen since the most stressed stretch of the market in February.
At the same time, capital flows that had supported the market earlier this month have retreated. Daily net stablecoin flows, which had averaged inflows of $250 million, turned into outflows of $292 million. ETFs and miners also moved from accumulation to selling, the company wrote.
So far, one key support remains intact: Onchain data shows that holders are not rushing to deposit BTC on exchanges en masse, a behavior often seen in outright capitulations.
