Nearly half of the bitcoin supply is underwater as seasoned investors capitulate and realize losses.

Nearly half of all bitcoin in circulation is now sitting at a loss, as market stress builds and key indicators point to growing pressure across investor groups.

According to CEX.IO, roughly 50% of BTC is currently trading below its cost basis. The Bitcoin Impact Index — which tracks stress levels using on-chain behavior, ETF and derivatives activity, and liquidity trends — jumped 13 points to 57.4 in the week ending March 28, marking its sharpest increase since January.

On a scale that tops out at 100, the index has entered the “high impact” zone, a level historically associated with widespread selloffs and double-digit price declines, including during major downturns in 2018 and 2022.

Long-term holders, defined as wallets holding bitcoin for more than six months, have seen conditions deteriorate quickly. Just a week earlier, when BTC traded above $70,000, this group remained in profit. Now, over 4.6 million BTC — around 30% of their holdings — are underwater, with realized losses last week hitting their highest level since 2023.

The report highlights this divergence between falling prices and weakening on-chain conviction as a potential red flag. Similar setups in mid-2018 and mid-2022 were followed by corrections of more than 25%.

Short-term holders are also under strain, with about 47% of total supply now held at a loss — levels last observed during February’s peak stress period.

At the same time, capital flows have turned negative. Stablecoin activity, which previously averaged $250 million in daily inflows, has flipped to outflows of roughly $292 million. ETFs and miners have also shifted from accumulation to net selling, adding further pressure to the market.

Even so, a key sign of full capitulation is still missing. On-chain data shows no large-scale movement of BTC onto exchanges — a behavior typically seen during panic-driven selloffs — suggesting that while stress is rising, a full-blown capitulation has yet to unfold.

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