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 jumped 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, jumped 13 points to 57.4 in the week ended March 28, its biggest rise since January, CEX.IO noted in a recent report.
That level, up to 100, puts it squarely in what is considered the “high-impact” zone that historically signals the types of selloffs that have led to double-digit price declines in 2018, 2022 and earlier this year.
Long-term holders, that is, wallets that have held BTC for more than six months, were selling profitably just a week ago when the cryptocurrency was trading above $70,000. Today, more than 4.6 million BTC in these wallets, or about 30% of their total holdings, are underwater, the report notes. Their losses last week were the worst since 2023.
“This type of divergence between on-chain price action and conviction has always been a warning sign,” the firm wrote. “For example, similar movements occurred in mid-2018 and mid-2022 before prices fell by more than 25%. »
Short-term holders fare no better. The report reveals that 47% of the total bitcoin supply is currently held at a loss, levels not seen since the market’s tensest period in February.
At the same time, the capital flows that had supported the market at the start of the month retreated. Daily net stablecoin flows, which averaged inflows of $250 million, turned into outflows of $292 million. ETFs and miners also moved from accumulation to sale, the company wrote.
So far, one key support remains intact: Onchain data shows that holders are not rushing to deposit BTC en masse on exchanges, a behavior often seen during total capitulations.
