On-chain data now shows 10.83 million BTC held at a loss — a record high by this metric — while simultaneously long-term holders (LTH) control a record 14.8 million BTC, their largest-ever share of circulating supply. The two records arriving together is the key dynamic: it tells you that a massive cohort is deeply underwater, but that the patient, 'diamond-hand' segment of the market has not flinched.
Historically, peaks in supply-in-loss have clustered near cycle bottoms. The 2018 bear market low and the June 2022 capitulation both saw similar spikes in this metric before price recovered. The concurrent record in LTH supply suggests distribution from this group has not begun — they are absorbing, not selling.
The bear tension is real, however. A record number of coins in loss means a vast overhang of potential sell pressure the moment price rallies toward those cost bases. If macro conditions worsen or liquidity tightens, forced selling from underwater short-term holders could cascade before LTH conviction provides a floor.
The critical thing to watch is whether LTH supply begins to decline — that would signal the patient cohort is finally distributing into any rally, which has historically marked intermediate tops. As long as LTH supply continues to climb or hold flat, the on-chain setup leans constructive for a medium-term recovery thesis, but the overhead supply of 10.83 million coins-in-loss is a genuine ceiling.