An analysis has emerged that while the proportion of Bitcoin (BTC) in a loss state has surged to 40.6% in the market, it is still too early to consider this a definitive bottom signal.

On-chain analyst Julio Moreno presented this outlook in a CryptoQuant contributor post. Moreno noted, "Recently, the amount of BTC in a loss state is on an increasing trend." He pointed out, "It is noteworthy that since 2015, the lows of every major cycle were formed whenever the percentage of BTC in loss reached the upper boundary of a long-term downtrend line."

However, he added that with each repeated cycle, the required loss percentage level to form a bottom has shown a gradual downward trend. He explained, "In early bear markets, a bottom was formed only when more than 60% of the total BTC supply entered a loss state, but in recent cycles, that threshold has continuously decreased."

He continued, "The current 40% level is a section where market stress has meaningfully expanded, but it has not yet reached the level historically evaluated as the maximum buying opportunity." Furthermore, he projected, "If BTC shows further weakness or moves sideways, the loss percentage could retest the critical trendline."