I’m staring at a CryptoQuant chart at 6 a.m., and the number jumps out at me: 11.2 million Bitcoin in profit. That’s the kind of figure that made sense in 2022 when people were panic-selling at $16,000. But it’s 2024 (well, heading into 2025), and we’re supposed to be in a bull market cycle, right?
Wrong. And that disconnect—between what the data says and what the crypto Twitter crowd keeps promising—is exactly the kind of thing you should be paying attention to.
Bitcoin supply in profit is now hovering near levels that defined the absolute worst moments of the last bear market. During 2022’s bloodbath, 9 million BTC hit that threshold. We’re currently at 11.2 million. That sounds worse. But here’s where it gets weird: 8.2 million Bitcoin are now underwater—a level we haven’t seen since late 2022. And yes, in the last bear market, that number reached 10.6 million. So we’re close, but not quite there.
The data is flashing amber lights. Or red ones. Or maybe both at the same time—and that’s exactly the problem.
Are We Actually at the Bottom, or Just Getting Warmed Up?
CryptoQuant analyst “Darkfost” looked at this data and saw something clear: undervaluation. The kind of setup that precedes a rally. Here’s the thesis:
“This suggests that the market is reaching a notable level of undervaluation, comparable to the conditions observed during the previous bear market.”
Sound promising? Yeah. But then Andri Fauzan Adziima from Bitrue exchange—a researcher, not some random Discord guy—walked into the room and threw cold water on the whole thing.
His argument hit harder than most crypto takes I’ve read in years: this isn’t capitulation. This is just stress. And stress is not the same as surrender.
In 2022’s real bottom, the pain was biblical. Over 50% of all Bitcoin supply was in the red. The supply in profit was below 45%. The NUPL metric—a measure of total unrealized gains across the whole network—was at extremes. We’re not there yet. Not even close.
Adziima thinks we’re looking at a “potential structural bottom near $55,000,” which is below where we are now. Meaning? More downside is likely coming. Not guaranteed, but the guy’s made a solid argument that should scare anyone who thinks we’re already safe.
The Dollar Problem Nobody Wants to Talk About
Here’s what really grinds my gears about crypto market analysis: everyone obsesses over Bitcoin’s price in a vacuum. Bitcoin up 5%, Bitcoin down 3%—but nobody talks about the actual context that matters.
Timothy Peterson—the author, not a random analyst—made a point that should be tattooed on every trader’s forehead: Bitcoin struggles when the US dollar is strong. And guess what? The dollar has gained 5% in two months. That’s not huge, but it’s a directional signal.
Why? Because when the dollar is king, capital flows into US bonds and cash. Why risk Bitcoin when you can get 4-5% yield on T-bills with zero volatility risk? And China’s weakness—the yuan is under pressure—means global liquidity is drying up. Tight liquidity plus a strong dollar equals the enemy of speculative assets.
Peterson’s prognosis is bleak: nothing changes until US interest rates fall. And that’s not happening until “the second half of 2026 or more likely 2027.” So if you’re waiting for the Fed to bail out Bitcoin, settle in. It’s going to be a while.
The Uncomfortable Truth Nobody’s Saying Out Loud
Bitcoin’s down 52% from its all-time high this cycle. That sounds bad—and it is—but here’s the uncomfortable detail buried in the data: previous bear markets saw 77% to 84% drawdowns. We’re not even halfway through typical pain levels.
This cycle has been weaker across the board. The bull run didn’t spike as high. The bear hasn’t dipped as deep. It’s like watching a muted version of what came before—less drama, less conviction, less reason to believe there’s real demand underneath.
So what’s actually happening? My read: we’re in that gray zone between “maybe the bottom is near” and “oh God, there’s still way more downside.” The data is ambiguous because the market is in a tug-of-war. Institutions are tentatively curious. Retail is shellshocked. The macro environment (strong dollar, high rates) is hostile. And nobody—absolutely nobody—knows when that flips.
The metrics that Darkfost pointed to could signal capitulation. But Adziima’s counterargument—that we’re seeing stress, not surrender—might be more accurate. And that difference matters enormously. One scenario leads to a bounce. The other leads to more capitulation.
What This Means for Your Portfolio (If You Dare Hold One)
If you’re a Bitcoin holder right now, you’re playing a waiting game. The supply metrics are getting closer to previous bear market lows, which is either a screaming buy signal or a warning that we’re about to see capitulation that makes 2022 look quaint. The on-chain data can’t tell us which one.
What we do know: the macro backdrop is brutal. The dollar is strong. Rates are sticky. China is weak. And Bitcoin has historically struggled in exactly this environment.
So here’s my hot take after 20 years of watching tech bubbles inflate and pop: if you’re thinking about catching the Bitcoin knife as it falls, maybe wait for more blood on the streets. Adziima’s $55,000 floor might be optimistic. The data suggests we’re nowhere close to “true capitulation” levels yet—and that’s when the real buying opportunity arrives.
But don’t ask me when that is. Nobody really knows.
🧬 Related Insights
- Read more: Reinsurance Rates Keep Falling Even as Iran Closes the Strait of Hormuz—Here’s Why
- Read more: Bitcoin’s Consolidation Trap: Why Bearish Bets Are Rising Even as Altcoins Rally
Frequently Asked Questions
Is Bitcoin heading to true bear market lows? Maybe. Bitcoin supply metrics are approaching 2022 levels, but not quite there yet. The last true bear market saw 10.6 million BTC underwater; we’re at 8.2 million now. More downside is possible before a real bottom forms.
Will the strong US dollar keep Bitcoin down? Yes—until interest rates fall significantly. Bitcoin typically struggles when the dollar is strong and yields are attractive. That’s not changing until late 2026 or beyond, according to analysts.
What Bitcoin price signals a real capitulation bottom? Around $55,000, according to Bitrue’s analysis. Bitcoin would need to drop further to match the pain levels (supply in loss >50%, MVRV extremes) seen during the 2022 bear market. We’re not there yet.
