Bitcoin has entered a zone that analysts Ali and Darkfost describe as historically rare. On-chain data shows more than 10.46 million BTC are currently held at a loss, a level that has coincided with major market bottoms in prior cycles. Ali explained that when a large number of holders are unwilling to realize losses, selling pressure tends to ease, increasing the probability of a bottom formation.
Over 10 Million BTC Underwater
A separate metric from Darkfost looks at the Power Law model. He said Bitcoin has dropped below the 4% quantile of that valuation framework, a zone where the asset has spent less than 4% of its trading history. According to Darkfost, such extreme undervaluation has typically been a time to build exposure rather than reduce positions. He cautioned, however, that the signal reflects a long-term time horizon and that short-term price action may remain volatile.
Realized Losses Approach Record Levels
Darkfost also examined realized losses across bear markets. The 2014 cycle saw roughly $2.4 billion in realized losses, while the 2019 downturn reached about $60 billion. Since Bitcoin's peak in October 2025, realized losses have accumulated to approximately $174 billion, still below the prior bear market's $211 billion. Darkfost noted that while current losses have not yet set a new record, they continue to climb as the correction unfolds. Both analysts emphasized that these indicators point to long-term accumulation opportunities rather than short-term trading signals.