• Bitcoin has seen more than 50% of its circulating supply fall into loss, a level historically associated with market bottoms.
• K33 Research argues that Bitcoin's return to its 200-week moving average strengthens the case for long-term accumulation.
• Meanwhile, Wintermute noted that ETF outflows and Strategy's selling continue to weigh on Bitcoin despite signs of long-term accumulation.

Bitcoin (BTC) dropped near $61,000 on Tuesday, with the latest sell-off pushing long-term market indicators toward levels historically associated with bear-market bottoms, according to a report by K33 Research.

Over 50% of Bitcoin's circulating supply falls underwater

The report states that the share of Bitcoin supply sitting at a loss surged from roughly 30% to more than 50% after the latest decline, indicating that over 10 million BTC were last moved at prices above current market levels.

Historically, major Bitcoin bear-market bottoms occurred after more than 50% of the circulating supply had fallen underwater.

"Every major BTC bottom (2011, 2014, 2018, 2022) saw more than 50% of supply in loss, and the figure rarely climbs far beyond that," K33 states.

The report also highlights that one-year returns following previous bottoms ranged from 69% to 359%, signaling a level at which investors can accumulate the top crypto.

"We see this as a level to accumulate aggressively, and view this as the part of the cycle that pays, not the part that hurts you," K33 notes.

The firm adds that Bitcoin has returned to its 200-week moving average. Following last week's sell-off, BTC briefly traded below the moving average, marking a drawdown of roughly 4.3% relative to its four-year average price.

According to K33, every major Bitcoin bear market has tested the 200-week moving average before establishing a cycle low. Previous bottoms in 2014-15 and 2018 formed near the level, while the March 2020 crash and the 2022 bear market temporarily traded below it.

"If BTC has indeed bottomed at the 200-week moving average, with more than 50% of the circulating supply in loss, the trough arrived much earlier and was significantly shallower than in previous cycles," K33 wrote.

Wintermute signals Strategy sale, ETF outflows as catalysts for current declines

While K33 emphasized historical bottoming signals, Wintermute analysts offered a more cautious assessment of the recent weakness.

Wintermute stated that attention initially focused on Strategy's disclosure that it sold 32 BTC the week before, marking the company's first Bitcoin sale since 2022. While the amount sold was insignificant, it had a symbolic effect on market sentiment.

"32 BTC is immaterial. Saylor selling for the first time in four years, into a market already bleeding flows, is not," Wintermute wrote.

Wintermute noted that US institutions led the Bitcoin sell-off, with exchange-traded funds (ETFs) data reflecting the trend. Spot Bitcoin ETFs recorded 10 consecutive sessions of outflows from May 30, totaling approximately $2.97 billion and contributing to a monthly net outflow of $2.43 billion, the largest of 2026.

The firm argued that Bitcoin has limited technical support below current levels because it spent little time trading between $50,000 and $59,000 during its 2024 rally, leaving market flows as the dominant driver of short-term price action.

"We're not calling the bottom here, because there's no sign of inflows returning and the macro is still difficult," the report stated.

Despite the caution, Wintermute noted that some long-term investors have begun steadily accumulating Bitcoin at current prices.

BTC trades at $61,770 at the time of publication, down 2.7% over the past 24 hours.