Bitcoin’s Low Share of Underwater Supply and $4.2B Net Realized Profits May Indicate Profit-Taking, Not Capitulation

• Loss supply low (9%) — signals limited underwater holdings.

• NRPL at $4.2B shows net realized profits despite a recent $943M realized-loss event.

• Historical comparison: prior cycle bottoms saw >25% supply underwater and NRPL turn negative.

Bitcoin capitulation unlikely: loss supply 9% and NRPL $4.2B point to profit-taking, not panic. Read the full market-structure analysis and key takeaways.

What is Bitcoin capitulation and is it occurring now?

Bitcoin capitulation is when holders sell en masse at a loss, driving NRPL negative and underwater supply sharply higher. Current data shows just 9% loss supply and a green NRPL of $4.2B, suggesting profit-taking rather than a capitulation event.

How does Bitcoin loss supply and NRPL reflect market conviction?

Loss supply measures the portion of circulating BTC whose cost basis exceeds spot price. At ~9% loss supply and NRPL at $4.2B, most holders are above water, which supports the view that recent selling is profit-taking.

Glassnode on-chain metrics show a $943 million realized-loss spike during the dip under $110k, but the NRPL did not flip red. For context, the 2022 bear market saw a ~63% annual decline, NRPL turned negative, and >25% of supply went underwater. That contrast underscores stronger market conviction today.

Source: Glassnode

Frequently Asked Questions

Is the current Bitcoin dip a capitulation?

The current dip looks more like profit-taking than capitulation. Key metrics: loss supply ~9% and NRPL $4.2B remain positive, unlike past capitulations when NRPL turned negative and a much larger share of supply went underwater.

How much realized loss occurred during the under-$110k dip?

About $943 million in realized losses were recorded during the dip under $110k, but the NRPL stayed positive, indicating net profits across the broader market rather than systemic capitulation.

Key Takeaways

• Low loss supply: Only ~9% of BTC supply underwater at the $110k level, far below typical bear bottoms.
• NRPL positive: $4.2B in net realized profits shows sellers are mostly booking gains, not losses.
• Market interpretation: Recent 11% pullback appears to be a healthy reset and profit-taking, not full capitulation; monitor NRPL and underwater supply for confirmation.

Source: Glassnode

Conclusion

Data-driven on-chain metrics suggest Bitcoin capitulation is not underway. Low loss supply (~9%) and a green NRPL ($4.2B) point to profit-taking and market resilience rather than mass selling at a loss. Continue to monitor NRPL and underwater supply for signs of structural weakening and use these metrics to inform risk management.