INSIGHT: Fewer Bitcoin holders are underwater, making a return to a bear market increasingly unlikely, per CryptoQuant.

What happened

CryptoQuant, a market analysis firm, reports that fewer Bitcoin holders are currently underwater, meaning they bought at prices higher than the current market value. This trend suggests a return to a bear market is increasingly unlikely, according to their data.

Confirmed

Global impact / market context

When fewer holders are underwater, there is less selling pressure, which can support Bitcoin's price. This stability may encourage more investor confidence and participation, potentially leading to higher demand and positive price momentum in the cryptocurrency market.

Analyst inference

This insight suggests a healthier market foundation, where investors are less likely to sell at a loss. A reduced number of underwater holders signals that the current price is above many purchase prices, which historically can precede sustained upward trends rather than sharp declines.

Analyst inference

What to watch

1. Monitor CryptoQuant's future data on Bitcoin holder profitability to see if the percentage of underwater holders continues to decline, which would further support the thesis of a reduced bear market risk. Confirmed
2. Investors could consider whether this indicator, showing fewer holders at a loss, aligns with their own risk assessment for Bitcoin, potentially justifying a more optimistic long-term positioning. Proposed
3. Observe if the reduction in underwater holders correlates with increasing Bitcoin trading volumes, as this could confirm that reduced selling pressure is attracting new buyers and stabilizing the market. Analyst inference

Affected assets

• BTC — Bitcoin

Evidence

• x.com