What strategies can investors use to manage high loss holdings in a bear market?
High Loss Holdings in Bitcoin, ETH, and SOL: A Bear Market Indicator?
In every crypto cycle, the phrase “most holders are underwater” resurfaces. In 2025, with spot Bitcoin and Ethereum ETFs live in the U.S. and Solana continuing to mature, investors are again asking: do high loss holdings in BTC, ETH, and SOL signal a bear market-or the late stage of one? This article explains how to read loss-based on-chain metrics, what history suggests for each asset, and how to combine signals with macro and market structure data.
What “high loss holdings” actually measures
Loss-based metrics quantify how much of the circulating supply was acquired at higher prices than today. They’re derived from on-chain realized prices (BTC/ETH) or approximate cost bases (SOL) and usually include:
- Supply in loss: percentage of coins/tokens whose last on-chain move occurred at a higher price than current spot.
- MVRV (Market Value to Realized Value): below 1 implies the market trades under aggregate cost basis.
- NUPL (Net Unrealized Profit/Loss): negative values indicate aggregate unrealized loss.
- SOPR (Spent Output Profit Ratio): below 1 means coins spent on-chain are realizing losses.
| Metric | Measures | Bearish read | Bottom-leaning read |
|---|---|---|---|
| Supply in loss | % of supply underwater | Rising and accelerating | High but stabilizing; flattening |
| MVRV | Price vs realized value | Falling toward 1 | Sub-1 for weeks/months |
| NUPL | Net unrealized P/L | Dropping into neutral | Decisively negative |
| SOPR | Realized P/L of transactions | Brief dips below 1 | Persistent sub-1, then a reclaim |
Historical context: BTC, ETH, and SOL through drawdowns
Bitcoin (BTC)
Bitcoin’s multi-cycle history shows a consistent pattern: the deepest bear phases coincide with MVRV below 1 and an elevated share of supply in loss. Critically, duration matters-prolonged periods of sub-1 MVRV and negative NUPL have preceded durable reversals. After 2024’s spot ETF launch, BTC gained new structural demand, but historic signals remain relevant: high underwater supply alone doesn’t confirm a bear; it often marks exhaustion when combined with low funding, reduced open interest, and improving spot flows (including ETF net inflows).
Ethereum (ETH)
ETH typically tracks BTC’s structure but adds staking dynamics and gas-demand variability. In past bear markets (2018-2019, 2022), ETH’s MVRV fell below 1 for extended stretches. In the 2024-2025 period, spot ETH ETFs and the staking yield environment complicate interpretations: a high share in loss can persist if gas fees compress and speculative activity wanes, yet a bottom bias strengthens when spot demand (ETF flows) and L2 activity rebound while MVRV remains subdued.
Solana (SOL)
SOL’s shorter history is more volatile. Post-2022 capitulation left a majority of holders underwater before a vigorous recovery into 2024-2025. Because SOL’s cost bases can cluster tightly around narrative-driven run-ups, “supply in loss” can spike swiftly on sharp pullbacks, then retrace just as quickly when builder activity, fee revenue, and new user cohorts return. For SOL, combine loss metrics with chain-specific signals like daily fees, validator health, client diversity, and DeFi/liquidity traction.
Is “high loss” bearish, or a bottom signal? Nuanced answers
High loss holdings can mean two opposite things depending on context:
- Bear continuation: when underwater supply is rising alongside deteriorating macro (tightening liquidity, rising real yields), negative funding, elevated exchange inflows, and risk-off across altcoins.
- Bottoming/accumulation: when loss metrics are high but stabilizing while derivatives leverage clears, SOPR remains sub-1 then flips above 1, and spot-led demand (including ETFs for BTC/ETH) absorbs supply.
Time is the tie-breaker. Swift spikes in loss often precede more downside; sustained periods of elevated unrealized loss coupled with improving spot absorption tilt bullish.
Cross-asset watchlist for 2025
| Asset | Key drivers | Loss metric to track | Extra variable |
|---|---|---|---|
| BTC | Spot ETF flows, macro liquidity | MVRV + supply in loss | ETF net inflows/outflows |
| ETH | Spot ETF flows, L2 throughput | NUPL + SOPR | Staking deposits/withdrawals |
| SOL | Throughput, fees, developer traction | Supply in loss | Validator set health, DeFi liquidity |
Note: As of 2025, U.S. spot Bitcoin and Ethereum ETFs are live; spot Solana ETFs have been proposed but not approved at the federal level. Always verify current status.
How to use the data in practice
- Blend on-chain with market structure: pair MVRV/NUPL with funding rates, term basis, and open interest to confirm deleveraging.
- Track spot vs derivatives leadership: bottoms often start with spot buying outpacing perp-led bounces.
- Watch stablecoin flows and exchange balances: rising stablecoin supply and declining exchange reserves support bottom theses.
- Segment cohorts: long-term holders realizing losses near bottoms is powerful; short-term holders in loss during chop is less informative.
- Cross-check with flows: for BTC/ETH, persistent ETF inflows while loss metrics stay elevated is constructive.
Conclusion
High loss holdings in BTC, ETH, and SOL are not a simple “bear market” stamp. Historically, a large underwater cohort often occurs late in bears and just before recoveries-especially when it persists, derivatives leverage resets, and spot demand absorbs supply. For Bitcoin and Ethereum in 2025, ETF flow data adds a high-signal confirmation layer; for Solana, chain-level activity and liquidity are key. Use loss metrics as context, not a trigger: when high unrealized loss meets improving spot flows, healthier funding, and resilient on-chain activity, the odds tilt from fear toward accumulation.
