Bitcoin has struggled to overcome the downward trend that started back in October. Despite multiple efforts to push higher, BTC has remained confined within the $84,000 to $95,000 range for several months.
This persistent stagnation has intensified bearish feelings among investors. Recently, a CryptoQuant analyst issued a cautionary note regarding Bitcoin’s outlook. Woominkyu from CryptoQuant highlighted that Bitcoin’s ‘Supply Loss’ metric is once again on the rise, signaling potential trouble ahead for the market.
Warning Signs Pointing Toward a Bear Market
The analyst explained that “the upward movement in Bitcoin’s lost supply is a recurring pattern observed at the onset of bear markets during previous cycles.”
He further elaborated that this trend suggests losses are spreading beyond short-term holders (STH) and beginning to affect long-term holders (LTH).
The concept of Missing Supply refers to the portion of Bitcoin’s total coins bought at prices above today’s value.
According to Woominkyu, shifts in this lost supply indicator have major implications for price direction; an increase typically precedes deeper declines or sustained bear phases.
“Historically—in 2014, 2018, and 2022—this indicator reversed upwards before genuine market bottoms were established.”
Following these reversals, prices weakened further until Lost Supply surged sharply prior to bottoming out.
The analyst concluded by noting that although current lost supply levels remain lower than those seen during past capitulations, its recent upward trajectory implies we might be entering a prolonged bear market rather than experiencing just a brief correction within an ongoing bull run.
“While Lost Supply is still significantly below historical capitulation thresholds, its directional change alone carries weight. This points toward a structural shift into bearish territory instead of merely undergoing temporary pullbacks amid bullish trends.”
*Please note: This information does not constitute financial advice.*