Bitcoin Supply Overhang: 6.6 Million BTC Bought Above Current Price

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On-Chain Indicators Signal Potential Bitcoin Volatility

On-chain data reveals a significant chunk of Bitcoin’s supply is being held above the current spot price, which could potentially shape volatility if BTC rebounds.

Supply In Loss Reaches 2023 Highs

According to community analysis, over 6.6 million BTC is currently being held above the latest spot price. The relevant on-chain indicator is “Supply In Loss,” which measures the total amount of Bitcoin carrying net unrealized losses.

This metric works by analyzing the transaction history of each token in circulation to determine the price at which it was last transacted on the blockchain. If this previous transfer price exceeds the current spot price, that token is considered to be in a state of loss. The indicator aggregates all coins meeting this condition to assess the overall network situation.

Bitcoin’s Supply In Loss shrunk to zero when the asset’s price reached its all-time high above $126,000 in October. However, with the subsequent market downturn, the indicator’s value has surged significantly.

Today, approximately 6.6 million tokens—equivalent to one-third of the circulating BTC supply—sit below cost basis. The recent highs in Supply In Loss represent the highest degree of market pain since 2023.

UTXO Realized Price Distribution Reveals Supply Clusters

Another key indicator, the UTXO Realized Price Distribution (URPD), contains information about how much BTC was purchased at each price level throughout the asset’s history.

The chart shows how Bitcoin supply currently in loss is distributed across various price levels, with some levels carrying particularly prominent supply clusters while others are notably thin.

Selling Pressure at Cost Basis Levels

Generally, investors holding underwater positions look forward to retesting their cost basis to recover losses. Once this happens, many of these holders decide to exit, fearing further downside. This selling pressure at large supply clusters above the spot price could create volatility points for Bitcoin.

Given that a substantial portion of supply is currently underwater, any venture back to higher price levels could encounter significant selling pressure.

Current Bitcoin Price

Bitcoin has made some recovery during the past day, with its price returning to $88,600.