As the supply of bitcoin (BTC) held at a loss has increased to 7.75 million coins, attention is again turning to potential selling pressure in the market.

Cryptopolitan, a blockchain media outlet, reported on May 25 local time that as of May the amount of bitcoin supply in loss rose from 7.64 million to about 7.75 million.

Bitcoin is trading in the $77,000 range. At that level, a substantial share of total supply falls into unrealised-loss territory. Based on BGeometrics data, the share of bitcoin supply in unrealised profit was about 53%. The key point is that loss-making supply has returned to levels commonly seen in bear-market phases.

The market is watching whether these holdings will turn into actual selling in a future downturn. An increase in loss-making supply is cited as a factor that can spur capitulation selling if prices fall. It means that if there is no clear catalyst to push bitcoin higher, unrealised-loss holdings could add to downward pressure. Still, the current loss-making supply is below the 9.7 million coins recorded in February.

The market structure has also changed from then. As ownership shifted in 2026, existing whales with lower purchase prices moved to sell, while some large investors accumulated at new price levels. Recently, bitcoin has stayed in a narrow range, with whale accumulation at lower prices and distribution above $78,000.

The shift in supply and demand is also clear. Exchange-traded fund (ETF) holders were pointed to as the group that sells bitcoin first, and buying by treasury-strategy companies, once seen as a steady source of demand, has effectively stopped. Over the past month, bitcoin volatility has fallen to about 1%, but analysts say the narrow range can also spur liquidations and speculative trading.

Flows also diverged by wallet size. Over the past 12 months, ultra-large whale wallets cut holdings by 8.5%, and regular whale wallets fell 3.72%. Over the past 30 days, the number of wallets holding 10 to 100 BTC fell by 41. By contrast, mid-sized wallets classified as sharks broadly maintained their holdings.

The biggest capitulation selling was seen among small wallets holding less than 1 BTC. In that bracket, more than 42,000 wallets were emptied, signalling large-scale capitulation led by individual investors. Most other wallet groups largely maintained their holdings. The interpretation is that small investors exited first, but it is not yet at a stage where the entire spot supply is being dumped in panic selling.

The average purchase price was also presented as an important benchmark. Since February, bitcoin has continued to be accumulated even as purchase prices rose. Accumulation started near $72,000 per bitcoin and recently climbed at one point to around $78,000. As of May 25, the average purchase price was $77,253. With little gap from the current price, it means holders' average unrealised losses remain limited.

As a result, the market's short-term direction is likely to depend on whether whale wallets keep holding and how aggressively they distribute strategically. Small-wallet exits and rising loss-making supply are bearish signals, but it is still not a phase in which the overall spot supply is pouring out in panic selling. Still, if some whales continue to sell in tranches above $78,000, bitcoin's short-term rebound is likely to face a capped upside.