Bear Market Risk Eases as Fewer Bitcoin Holders Are Underwater

Fewer Bitcoin holders are currently sitting on unrealized losses, according to CryptoQuant's latest analysis.

This shift is seen as a sign that a return to a bear market is increasingly unlikely. The assessment comes from an examination of the proportion of Bitcoin holders whose coins are worth less than their acquisition cost, known as being 'underwater.'

CryptoQuant has been using investor profitability and supply-in-loss metrics to analyze Bitcoin's broader market cycle. In June, the firm reported that around 47% of Bitcoin's supply was held at a loss or break-even position.

However, the latest data shows an improvement in holder profitability. With fewer holders underwater, the distribution of unrealized losses across the market has become less pronounced. This distinction matters because the cost basis of Bitcoin holders can influence how investors behave during periods of price volatility.