More than half of Bitcoin (BTC) addresses are still in profit, raising questions about the severity of the current “bear market.”

Data from on-chain analytics firm Glassnode confirms that as of June 20, 56.2% of addresses were still worth more in U.S. dollar terms than when their coins entered them.

Profitability fails to match previous market bottoms

As BTC/USD fell to 19-month lows of $17,600 over the weekend, analysts braced for what they assume will turn out to be a retracement of up to 84.5% from all-time highs.

A sense of confusion reigns this year thanks to those highs not being “high enough” compared to historical bull market tops.

The subsequent drawdown has thus taken many by surprise, despite so far not matching previous bear markets.

The Glassnode figures support that idea. BTC price bottoms have tended to coincide with less than half of addresses remaining in profit, and as such, the current downtrend still has a way to go if it is to fit in with historical patterns.

In March 2020, for instance, profitable addresses dropped to 41%, and before that, the 2018 bear market also saw a drop below the 50% mark.

Bitcoin percent of addresses in profit chart. Source: Glassnode

Panic, however, may already be setting in. As Cointelegraph reported, realized losses have been mounting among hodlers too uneasy about babysitting their funds any longer.

June 13 saw the largest on-chain realized losses in BItcoin’s history, these hitting $4.76 billion in a single 24-hour period.

Bitcoin realized losses chart. Source: Glassnode

Market “getting closer” to the big short

On the topic of how much selling needs to take place before the market reverses, Dylan LeClair, senior analyst at UTXO Management, eyed a split between retail and derivatives traders.

Related: BTC price recovers to 3-day highs as new whale support forms at $19.2K

In times gone by, he argued this week, retail has sold first, and speculators come in to finish the process by shorting BTC to unnaturally low levels.

“Getting closer,” part of a tweet summarized alongside a chart showing the costs to shorters increasing as price action waned in recent days.

Bottom is in when the derivatives market is shorting $BTC into the dirt after the brunt of the spot selling has taken place.

Getting closer…

— Dylan LeClair (@DylanLeClair_) June 20, 2022

LeClair added that more liquidations are likely necessary in the DeFi space before a definitive bottom can be put in.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

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