Bitcoin May Be Near Cycle Bottom, K33 Research Warns
K33 says more than half of Bitcoin's supply is underwater — a signal that has historically preceded major recoveries within weeks.
A closely watched on-chain metric is flashing a historically significant warning sign for Bitcoin: more than half of the cryptocurrency's circulating supply is currently held at a loss, according to research firm K33. That threshold has rarely been crossed, and when it has, it has tended to mark the final stages of a bear market rather than the beginning of a prolonged decline.
K33's analysis draws on multiple prior Bitcoin market cycles, each of which saw the asset bottom within weeks of this majority-underwater condition emerging. Crucially, those bottoms were followed by strong one-year returns in most previous instances — a pattern that, if it holds, would suggest the current moment of peak pain may carry meaningful upside for investors willing to absorb near-term volatility.
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The metric carries analytical weight because it captures the aggregate psychology of the Bitcoin holder base. When more than half of all coins in circulation are sitting below their acquisition price, selling pressure from distressed holders tends to reach an exhaustion point. At that stage, the marginal seller has largely already sold, which can remove a structural drag on price and set the stage for demand to reassert itself.
That said, past cycles unfolded in market environments that differed significantly from today's — including different regulatory landscapes, institutional participation levels, and macroeconomic backdrops. K33's observation is probabilistic rather than deterministic: the signal raises the odds of a near-term bottom without guaranteeing one. Analysts caution that novel macro pressures, such as elevated interest rates or shifts in risk appetite, could extend the timeline beyond historical norms.
For long-term investors and market observers, the data point nonetheless adds to a growing body of on-chain evidence suggesting Bitcoin may be closer to a floor than a freefall. Continue reading at Cointelegraph.
