Fewer Bitcoin Holders Are Underwater as CryptoQuant Sees Lower Bear-Market Risk

Bitcoin holders move out of unrealized losses as CryptoQuant data points to reduced bear-market risk

Fewer Bitcoin holders are currently sitting on unrealized losses, a shift that CryptoQuant says is making a return to a bear market increasingly unlikely.

The assessment was highlighted by Cointelegraph in a post on X on Sept. 17, citing analysis from the on-chain analytics firm. The metric focuses on the portion of Bitcoin holders whose coins are worth less than their acquisition cost, commonly described as being “underwater.”

Bitcoin Holder Profitability Improves

A reduction in the number of underwater holders indicates that a larger portion of Bitcoin's supply has moved into profitable or break-even positions. CryptoQuant has used investor profitability and supply-in-loss metrics as part of its analysis of Bitcoin's broader market cycle.

Earlier CryptoQuant research examined the proportion of Bitcoin supply held at a loss alongside spending behavior among long- and short-term holders. In June, the firm said supply in profit had fallen to roughly 47%, meaning more than half of Bitcoin's supply was then at break-even or in a loss position.

The latest assessment points to an improvement from that environment. With fewer holders underwater, the distribution of unrealized losses across the market has become less pronounced.

That distinction matters because the cost basis of Bitcoin holders can influence how investors behave during periods of price volatility. Holders carrying losses may face different incentives from those sitting on gains, particularly when prices approach their original purchase levels.

CryptoQuant's Bear-Cycle Assessment

CryptoQuant's latest view adds to a series of on-chain indicators the firm has used to assess whether Bitcoin remains in a prolonged bearish phase.

In August, CryptoQuant reported that Bitcoin whale holdings had increased from about 2.87 million BTC in December 2025 to approximately 3.06 million BTC, excluding exchange and mining-pool balances. The firm described the accumulation pattern as a potential sign associated with later stages of previous bear markets, while cautioning that the market remained exposed to further downside.

The firm has also previously distinguished between a market recovery and a confirmed trend reversal. In July, CryptoQuant said Bitcoin's rebound from around $57,700 should still be viewed as a bear-market recovery at that stage, noting that its Bull Score Index remained in bearish territory.

The latest holder data therefore represents one component of a broader on-chain framework rather than a standalone measure of Bitcoin's future direction.

Market Risk Remains Dependent on Multiple Indicators

Fewer underwater holders do not eliminate the possibility of renewed price declines. Bitcoin's market structure can change as prices move, while demand, liquidity and broader financial conditions can affect the distribution of unrealized gains and losses.

CryptoQuant's analysis instead identifies the changing profitability of Bitcoin holders as evidence that the conditions associated with an extended bear cycle are becoming less pronounced.

Cointelegraph's Sept. 17 post did not provide a specific price target or timetable for the market. The immediate focus remains on whether the improvement in holder profitability persists as Bitcoin's broader on-chain conditions develop.

writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.