Fewer Bitcoin holders are underwater, according to CryptoQuant. The improvement suggests Bitcoin bear market risk is becoming less pronounced. CryptoQuant views the changing holder position a
The number of Bitcoin holders sitting on unrealized losses is declining, a shift that CryptoQuant says makes a return to a bear market increasingly unlikely.
When Bitcoin trades below an investor’s purchase price, that holder is considered “underwater.” A large share of underwater investors can create additional market pressure, particularly when prices recover and holders decide to sell near their break-even levels.
With fewer holders now in this position, that potential source of selling pressure may be weakening.
CryptoQuant’s assessment suggests Bitcoin’s market structure is improving as more investors move back into profitable positions.
A decline in underwater supply can indicate that Bitcoin has moved further away from levels where large groups of investors are holding unrealized losses. It can also improve overall market sentiment as holders regain profitability.
The trend does not guarantee that Bitcoin will continue rising. Short-term corrections can still occur, while broader economic conditions, liquidity and investor demand can quickly influence the market.
Still, CryptoQuant sees the reduction in underwater holders as evidence that Bitcoin bear market risk is becoming less significant.
INSIGHT: Fewer Bitcoin holders are underwater, making a return to a bear market increasingly unlikely, per CryptoQuant. pic.twitter.com/Ah4hWkgfsm
— Cointelegraph (@Cointelegraph) September 17, 2026
The latest on-chain signal adds another metric for traders trying to determine Bitcoin’s position in the current market cycle.
Investor profitability is closely watched because changes in unrealized gains and losses can influence holder behavior. As fewer investors remain underwater, the market may face less pressure from holders looking to exit positions after recovering previous losses.
CryptoQuant’s analysis therefore points toward a healthier market structure, although Bitcoin’s next major move will still depend on whether demand remains strong enough to absorb available supply.
