- Ali notes that 10.46 million BTC are currently held at a loss, a level that has historically coincided with major market bottoms.
- Darkfost says Bitcoin has fallen below the 4% Power Law valuation quantile, a rare zone associated with long-term undervaluation.
- Realized losses have reached about $174 billion since Bitcoin’s peak, approaching but still below the previous bear market record of $211 billion.
Bitcoin has reached a level that analysts Ali and Darkfost believe deserves close attention after recent market weakness. More than 10 million BTC are now being held at a loss, while Bitcoin has also fallen into a historically rare valuation range under the Power Law model. Both analysts pointed to long-term metrics rather than short-term price action.
Underwater Supply Reaches Historic Threshold
According to analyst Ali, Bitcoin has often formed major market bottoms when more than 10 million coins trade below their acquisition price. He said that threshold has now been exceeded, with 10.46 million BTC currently underwater.
Ali explained that selling pressure can begin to ease once fewer holders are willing to lock in losses. He added that this shift has historically increased the probability of a market bottom developing.
While discussing longer-term conditions, analyst Darkfost highlighted another metric. He said Bitcoin has dropped below the 4% quantile on the Power Law model, placing the asset in a zone of extreme undervaluation.
Power Law Model Signals Rare Valuation
Darkfost noted that Bitcoin has spent less than 4% of its trading history at valuations this low compared with its long-term growth trend. According to his analysis, these periods have generally been associated with building exposure rather than reducing positions.
However, he stressed that the signal reflects a long-term timeframe and that any market exposure should be managed carefully.
Alongside valuation data, Darkfost also examined realized losses across previous bear markets. He said the 2014 downturn recorded roughly $2.4 billion in realized losses, while the 2019 cycle reached about $60 billion.
Realized Losses Continue to Build
According to Darkfost, approximately $174 billion in realized losses have accumulated since Bitcoin’s October peak. That figure remains below the roughly $211 billion recorded during the previous bear market.
He added that current losses have not yet established a new record, although they continue to grow as the broader correction develops.