Bitcoin’s 43% Loss: The Most Underwater Market Yet-What Happens Next?

Nearly Half of All <a href="https://bbg-news.com/btc-usd/">Bitcoin</a> Is Underwater, Glassnode Flags Warning

Key Highlights

43% of Bitcoin’s circulating supply (~8.9 million BTC) is now held at a loss, the highest concentration of loss-bearing supply since the early 2023 recovery.
Historical cycle bottoms occurred at 50–60% supply in loss, meaning the current reading is elevated but has not yet hit peak capitulation levels.
Over 429,000 BTC have been accumulated in the $60K–$70K band since January 2026.

While Bitcoin is currently trading around $68,000, that price doesn’t reveal the full story. A significant 43% of all Bitcoins currently in circulation are actually held by owners who are operating at a loss.

Almost half of all Bitcoin currently in circulation was last purchased at a higher price than it’s worth today. Data from Glassnode shows about 8.9 million BTC are currently held at a loss, representing the largest amount of unprofitable Bitcoin since the recovery from the low prices experienced during the FTX collapse in early 2023.

If you’re following cryptocurrency, this isn’t just another number – it’s a pattern we’ve seen before every major low point in Bitcoin’s price. Given recent global events, a disappointing jobs report, and a strong dollar, investors are now wondering if the current 43% drop represents the lowest price we’ll see, or if prices could fall even further.

If the price of Bitcoin falls below what someone originally paid for it, that Bitcoin is considered ‘at a loss.’ As of March 7, 2026, about 11 million Bitcoin are currently worth more than their purchase price, while around 8.9 million are worth less. These two groups move in opposite directions, and together they make up the total circulating supply of roughly 19.8 million Bitcoin.

How Bitcoin Went From $126K to $68K

Bitcoin’s price dropped 46% from its peak of around $126,000 (reached in October 2025), and this decline wasn’t an isolated event. Several major economic and global political factors contributed to the recent sell-off.

As an analyst, I’ve been closely watching the escalating conflict between the U.S. and Iran. Since late February 2026, the active military actions have driven oil prices up, nearing $90 a barrel, and created a general sense of risk aversion in the markets. The situation worsened on March 6th when Trump publicly stated that any deal with Iran would require their complete surrender, which caused significant drops in both crypto and stock markets.

Recent U.S. jobs numbers were surprisingly weak. The economy actually lost 92,000 jobs in February, which is a significant drop and the largest loss in several years. Economists had predicted a gain of 55,000 jobs. As a result, the unemployment rate rose to 4.4%, causing concern in financial markets.

The U.S. dollar recently had its biggest weekly increase in a year, which put downward pressure on Bitcoin and other assets typically priced in dollars.

Recent Bitcoin price movements suggest that investors who bought Bitcoin when the price dropped to between $60,000 and $65,000 quickly sold their holdings around $74,000, limiting further price increases. This selling pressure came from newer Bitcoin owners cashing in their profits, as shown by a surge in Bitcoin being sent to exchanges.

Negotiations on the CLARITY Act have hit a roadblock. Banks have turned down the White House’s proposed changes to how stablecoins earn yield, which is delaying a major bill designed to regulate the U.S. cryptocurrency market. As a result, investors are bracing for continued uncertainty about future crypto rules.

Every Cycle Bottom Has Looked Like This

The supply-in-loss metric is noteworthy because it has consistently predicted the end of Bitcoin bear markets. Historically, when the amount of Bitcoin held at a loss equals the amount held at a profit, it has signaled a clear bottom for each major downturn.

Cycle Bottom	Price	Supply in Loss	What Followed
2015	~$200	~55–60%	Recovery to $20,000 ATH by Dec 2017
Jan 2019	~$3,300	~55%	Rally to $14,000 within 6 months
Mar 2020	<$4,000	~53%	V-shaped recovery; $64K by Apr 2021
Nov 2022	~$15,000	~55%	Recovery to $73K by Mar 2024
Mar 2026	~$68,000	~43%	TBD—convergence ongoing

Currently, the reading is high at 43% and continues to rise, but it hasn’t reached the 50–60% level typically seen when Bitcoin hits a low point. An analysis from February 2026 by Glassnode suggests that if profit and loss levels were to meet at current prices, it could indicate a Bitcoin price around $60,000.

Why This Cycle’s Pain Feels Different

What makes this market decline different from past ones isn’t just that prices are falling, but *where* they’re falling to – the actual price point is significantly different, and that’s what’s causing the current difficulties.

Historically, during market lows, between 50% and 60% of Bitcoin supply was held by investors who had bought at prices ranging from $200 to $15,000. Currently, 43% of Bitcoin is considered ‘underwater’ – meaning it’s worth less than what investors paid for it – at a price of $68,000. This would have been considered a very high price during previous market cycles. The reason so much supply is currently underwater at a relatively high price is due to the 2024-2025 bull run, which brought in many new investors – particularly through spot Bitcoin ETFs – who purchased Bitcoin between $80,000 and $126,000.

According to data from CryptoQuant, Bitcoin holders began experiencing net losses in late 2025. They collectively lost money on around 69,000 BTC, a similar trend seen when the market shifted from a bull run to a bear market between 2021 and 2022.

As a researcher tracking the crypto market, I’m seeing increasing pressure from an unusual source: corporate treasuries holding Bitcoin are currently ‘underwater’ – meaning the value of their holdings is below what they originally paid. A prime example is Strategy, formerly MicroStrategy, which holds 717,000 BTC with an average purchase price around $76,000 per coin. This means their entire Bitcoin position is currently showing a paper loss. What’s different this cycle is the sheer scale of these institutional holdings – we simply haven’t seen this level of ‘overhang’ in previous market downturns.

Smart Money Is Building

As a researcher, I’ve been closely watching the on-chain data, and despite the recent price drops, it’s showing some interesting accumulation. Specifically, Glassnode’s URPD data indicates that over 429,000 Bitcoin were bought between $60,000 and $70,000 from January 1st to late February 2026. That’s a significant 43% increase in the amount of Bitcoin held in that price range, suggesting strong buying pressure even during the downturn.

More than 8% of Bitcoin currently in circulation was purchased within a specific price range, creating a strong base of support. However, the $70,000–$80,000 range has very little historical trading activity, meaning prices can change rapidly there. We recently saw this happen when Bitcoin’s price dropped from $80,000 to $70,000 in only five days, demonstrating how quickly the price can move through areas with low trading volume.

This presents a straightforward scenario for traders: Bitcoin appears to be finding strong support between $60,000 and $70,000. However, price increases above $70,000 might be unstable and quickly fall back down until more sellers emerge at those higher levels.

Three Scenarios to Watch

Scenario 1: Continued Grind Toward $60K

If global political issues worsen and economic challenges continue – like a strong US dollar, delayed interest rate reductions, and problems with private lending – the gap between profits and losses in the market could widen. Glassnode’s analysis suggests this could happen around the $60,000 price level, which is near a predicted low point in February 2026. One investment company has even cautioned that prices could fall another 30%, based on typical four-year market cycles.

Scenario 2: Consolidation and Base-Building at $65K–$70K

Bitcoin might find support around the $60,000 to $70,000 price range, potentially leading to a period of sideways trading as the broader economic situation becomes clearer. Two major events that could influence the price are the Federal Reserve’s interest rate decision on March 18th and any developments in the Middle East. Data also suggests that long-term Bitcoin holders are starting to show signs of reduced selling.

Scenario 3: Relief Rally on Macro Shift

Recent, weaker-than-expected job numbers suggest the Federal Reserve might start cutting interest rates in the first half of 2026. If global tensions ease and expectations for these rate cuts become more certain, Bitcoin—which closely follows the Nasdaq stock market—could rise again, potentially reaching $75,000 to $80,000. While investment into Bitcoin ETFs has been inconsistent lately, it generally remains positive.

The current price is in a difficult spot – it’s causing pain for some investors, but it might not be enough to shake out everyone who’s likely to sell. Historically, the best gains have come from buying during periods of high fear and panic. However, past price increases from 43% to 55% have often been volatile and challenging. A key indicator that we’re nearing a bottom is when both profitable and losing Bitcoin holders start selling, which has happened consistently in past market cycles.

2026-03-07 15:20