Nearly half of the Bitcoin supply is in the red as long-term investors take profits

Nearly half of Bitcoin’s supply is underwater as long-term investors lock in profits

The Bitcoin market is sending clear signals of pressure as nearly half of the total amount of BTC in circulation has fallen below the average purchase price of investors. New data shows that the Bitcoin Impact Index has surged to 57.4, reflecting significant stress in the ecosystem—especially as long-term investors begin selling at lower price levels.

Loss pressure spreads across the entire market

According to observed figures, about 50% of the Bitcoins currently in circulation are held in an “underwater” state, meaning the market price is below the cost basis of their owners. This is a sign that many investors are taking losses that haven’t been realized yet, as market sentiment becomes more cautious.

Bitcoin Impact Index rises to 57.4, indicating that stress levels are at a high threshold. This index is often used to measure the impact of price volatility on holding and trading behavior in the market. When the index spikes, it usually means selling pressure may continue to increase if the price does not recover soon.

Long-term investors begin realizing losses

The most notable point in this phase is that the group of long-term investors has started selling Bitcoin even while they are still at a loss. This often happens when the market enters a phase of waning confidence, or when liquidity pressure forces them to reduce their positions.

In previous cycles, the selling behavior of long-term hodlers has often been a signal that the market is going through a strong phase of distribution. When long-time holders no longer have the patience to wait for a price rebound, the risk of volatility typically increases more sharply in the short term.

What does the Bitcoin Impact Index say?

The Bitcoin Impact Index is an indicator that reflects the degree to which price volatility impacts the entire Bitcoin network. A level of 57.4 shows that the market is not only under pressure from price, but also from investor emotions and behavior.

When this index is high, the market often becomes more sensitive to macro news, liquidity, and actions such as taking profits or cutting losses. This is especially important in the context that Bitcoin is an asset with high volatility and is heavily dependent on market sentiment.

What scenario could happen next?

If selling pressure from long-term investors continues to hold, Bitcoin may have to face another round of correction or a prolonged period of sideways movement before finding a new balance. Conversely, if buy demand absorbs the supply being released well, the market could stabilize again soon.

At the moment, the fact that nearly half of the BTC in circulation is in a loss state is a clear reminder that the market is still fragile. Investors need to closely monitor price movements, liquidity, and on-chain indicators to assess whether this is only a short-term correction phase or a signal of a new accumulation period.