Previous bear markets ended with the majority of addresses being out of the money, on-chain data shows.
Most addresses holding bitcoin (BTC), the largest cryptocurrency, are now in the red, the first time that's happened since the start of the coronavirus-induced crash of March 2020.
Just over 51%, or 24.6 million addresses of the total 47.9 million, are below purchase price on their investments, according to data provided by blockchain analytics firm IntoTheBlock. About 45% are in the money, which means they are boasting unrealized gains, while the rest are roughly at break-even
IntoTheBlock defines out-of-the-money addresses as those that acquired coins at an average price higher than bitcoin's going market rate of $16,067.
The bearish momentum looks overdone, according to Lucas Outumuro, head of research at IntoTheBlock.
Previous bear markets ended with the majority of addresses being out of-the money.
The percentage of out-of-the-money addresses stood at 55% in January 2019. Bitcoin bottomed near $3,200 around the same time and began a bull run three months later.
The percentage of addresses out of the money rose to 62% during the depths of the 2015 bear market.
Past data, however, is no guarantee of future results, and the fallout from the collapse of crypto exchange FTX may bring more pain to the market.