Bitcoin Loss Supply Hits 51.6%, Ethereum Fear Peaks as SpaceX $135 IPO Nears

Crypto News

More than half of all Bitcoin in circulation is now held at a loss, a rare reading that has historically clustered near major market bottoms. On-chain data shows the share of supply underwater climbed from roughly 34% to 51.6% in about a month, leaving the market split almost evenly between coins in profit and coins below cost basis. The metric tracks each coin against the last on-chain price it moved at, making it a cleaner gauge than sentiment surveys. Comparable readings appeared near the 2015, 2018, and 2022 lows, though history warns that recovery from this level tends to be slow rather than a sharp V-shaped rebound.

The structural pressure deepened as Bitcoin traded near $62,000 following a 14% weekly decline, returning to levels last seen in September 2024. Market maker Wintermute argued in an 8 June note that capital has not yet returned and that the drop was driven mainly by U.S. institutional selling and spot ETF outflows rather than Strategy's modest 32 BTC sale. Disclosures this week showed Strategy resumed buying with a 1,550 BTC purchase. Sentiment data underscored the strain, with one positive-sentiment gauge collapsing from 814 on 3 June to 61, a decline exceeding 92% as the sell-off spread psychologically across holders.

Capital markets attention is now turning to SpaceX, set to debut on Nasdaq Thursday, 11 June at $135 per share in what is billed as the largest initial public offering in history. Elon Musk is barred from selling any shares for a full year, yet investors hand-picked by senior executives for a 5% direct share purchase program face no lockup and can sell from the opening bell. Early backers outside that allocation face staggered releases, beginning with 20% after the first earnings report. At least one hedge fund is already preparing to offload its stake, foreshadowing meaningful day-one selling pressure.

Security researchers flagged a fresh risk to decentralized finance after Anthropic released Claude Fable 5, the public version of a previously restricted model, on 10 June. The system, which has already surfaced more than 10,000 critical software vulnerabilities, falls back to a less capable model for sensitive cybersecurity prompts in under 5% of sessions. Smart-contract auditing, however, resembles a coding task rather than a blocked security category, leaving unaudited protocols running publicly visible blockchain code newly exposed. A lighter model from the same lab previously found a critical bug in Zcash within 24 hours, a flaw that had survived four years of expert review.

Regulated prediction market Kalshi rolled out three market-integrity measures effective immediately, requiring traders to disclose employment before accessing markets flagged for elevated insider or manipulation risk. The exchange now assigns a risk score to each proposed listing based on six factors, including corporate KPI risk, outcome concentration, and national security exposure. According to the company's own disclosures, its surveillance opened more than 150 investigations this year, blocked over 100 potential insider trades, referred more than 20 cases to law enforcement, and produced five disciplinary actions in the first quarter. The package follows a wave of insider-trading concerns engulfing the broader prediction-market sector.

Ethereum sentiment slid into extreme fear as ETH traded near $1,626 after a 12% weekly drop, with negative social posts now dominating discussion. On-chain sentiment data shows the positive-to-negative comment ratio fell to roughly 1.09, among the lowest readings of the year and a zone that has historically preceded rebounds. The contrast with 22 April is stark, when extreme greed accompanied ETH above $2,400 before a 32% decline. Analysts compared the current breakdown to June 2022, when Ethereum crashed to $880 before marking the cycle bottom. Having peaked near $4,953 in August 2025, ETH now sits below its 200-day weekly average, with $1,500 the next support to watch.

Taken together, these developments trace a single arc: a market draining patience rather than capitulating in one violent move. COINOTAG's aggregate data captures the strain, with the Fear & Greed Index pinned at 9 of 100 in extreme fear and total crypto market capitalization compressed to roughly $1.74 trillion. Bitcoin dominance has climbed to 70.2%, a defensive rotation that typically intensifies the bear market pain across altcoins like Ethereum even as on-chain loss metrics flash historically significant bottoming signals. With the SpaceX listing, U.S. inflation data, and a Federal Reserve meeting all converging this week, COINOTAG views the coming sessions as a decisive test of whether time-based capitulation has run its course.