After Bitcoin fell back to the $60,000 to $62,000 range, on-chain profit margins contracted significantly, while unrealized losses expanded rapidly. Foreign media analysis suggests that approximately 10.46 million BTC are currently in a floating loss state, a level that has historically appeared near important cyclical lows multiple times.
Unrealized losses have risen to a sensitive level.
The article points out that when a large number of Bitcoin holdings turn into losses, some investors' willingness to sell often decreases, and market selling pressure weakens accordingly. In past cycles, when more than 10 million BTC were in a loss-making state, the market had usually entered a phase where valuations were significantly compressed.
However, this signal does not mean that the bottom has been confirmed. If subsequent buying can absorb these unprofitable shares, the market may gradually enter a bottoming phase; if demand remains insufficient, prices may fall further.
MVRV dropped to 1.1
The MVRV metric, which measures market valuation, has now fallen to 1.1, meaning that Bitcoin's overall market capitalization is only slightly higher than the average on-chain holding cost. The article argues that most of the speculative premium accumulated during the earlier rally has been absorbed in this correction.
According to the calculations in the article, if prices fall further towards $50,000, the MVRV could approach 1.0. This level is historically rare and is usually only seen near larger cycle lows.
Long-term holders resume net purchases
On-chain data also shows that the net position of long-term holders has turned positive again. In the last 30 days, this group has absorbed approximately 30,000 to 35,000 BTC, ending the repeated fluctuations that had lasted for several months.
The article argues that this indicates some long-term funds have begun increasing their positions during the pullback, and market shares are slowly shifting away from short-term participants. However, the pace of this increase remains moderate and has not yet shown signs of aggressive buying.
Overall, on-chain valuations and holdings are approaching historical lows, but whether the market has truly bottomed out depends on whether broader funds begin to flow back in.
