Bitcoin, Ethereum, and Solana: Examining the Supposed Bear Market Indicators

By: crypto insight|2025/11/27 08:00:07

Key Takeaways:

At first glance, Bitcoin, Ethereum, and Solana’s apparent high loss percentages suggest a potential bear market, but deeper analysis reveals a more complex picture.
Over 40% of Ethereum and 75% of Solana are locked in staking, ETFs, or strategic reserves, mitigating immediate sell risk.
Bitcoin’s reportedly large supply at a loss is mitigated by institutional holdings and a significant portion lost permanently.
The actual liquid supply under pressure for these cryptocurrencies is notably lower than initial figures imply, challenging the notion of widespread panic selling.

WEEX Crypto News, 2025-11-27 07:57:34

Recent insights into the cryptocurrency markets have sparked concerns among investors about a potential bear phase, especially given the reported high percentages of Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) held at a loss. Such statistics could understandably induce anxiety, as they ostensibly herald bearish trends. However, a more nuanced analysis paints a different picture, one where the complexities of market mechanics and investor behaviors play crucial roles.

Understanding the Data Behind Bitcoin, Ethereum, and Solana Losses

Recent findings indicated that 40% of Bitcoin is held at a loss. Ethereum and Solana appear similarly bleak, with 40% and a staggering 75% of their respective supplies in loss positions. These figures naturally prompt the query: Are we on the brink of a bear market?

Bitcoin’s True Liquid Supply

While Bitcoin’s loss metrics seem daunting, they don’t fully reflect the true nature of its market liquidity. Currently, about 35% of Bitcoin’s supply is held at a loss, reminiscent of when Bitcoin was last priced around $27,000. Yet, to frame this correctly, consider the following data:

BTC Circulating Supply: Stands at 19,953,406 BTC.
Institutional Holdings: Public/private companies, ETFs, and governments command 3,725,013 BTC.
Permanently Lost BTC: Estimates suggest between 3,000,000 to 3,800,000 BTC are unrecoverable, representing roughly 15% to 19% of the total circulating supply.

Together, these factors siphon about a third of all Bitcoin from liquid circulation. Institutional holders and lost coins, which do not react to short-term losses, significantly lower the at-risk supply.

Ethereum’s Staked Supply Contours

Ethereum requires a more profound dive for interpretation. Though 37% of ETH is allegedly held at a loss, its market behaviors tell an intricate tale. Key figures illuminating Ethereum’s market dynamics include:

ETH Circulating Supply: Recorded at 120,695,601.
ETH Staked: A total of 35,681,209 ETH is locked in staking, which equates to approximately 29.6%.
Asset Allocations in ETFs and Reserves: Spot ETFs hold 6.26 million ETH (about 5.18%), while strategic reserves account for 6.36 million ETH (roughly 5.26%).

In sum, upwards of 40% of Ethereum’s supply is locked away, unavailable for immediate liquidation under normal market conditions. Institutional strategies generally focus on long-term accumulation and are relatively impervious to short-term market volatilities.

Solana: A Leader in Staking

Solana offers another layer of complexity with its figures. Despite reports of 70% of its supply at a loss, Solana’s metrics beg further exploration:

SOL Circulating Supply: Totals at 559,262,268.
Staking Insights: A robust 73.6% of this supply is staked, amounting to 411,395,790.5 SOL.
ETFs Involvement: Less impact here, with only about 1% of the supply involved.

Such data showcases that a massive proportion of Solana’s supply is embedded within long-term staking strategies, a factor that naturally insulates it from precipitous sell-offs. As Solana’s price dynamics indicate, when the price movements are upward, these loss holdings dwindle sharply, reflecting price velocity more than investor despair.

Delving Deeper: Market Dynamics and Investor Behavior

Across BTC, ETH, and SOL, these raw loss percentages—alarming at first—tend to amplify perceived sell pressures. When contextualized against the backdrop of staked supplies, institutional holdings, and permanently inaccessible coins, the landscape alters considerably.

Beyond Immediate Price Indicators

In every financial market, headline statistics provide a snapshot, but rarely tell the full story. In this scenario, they exaggerate the sell-off potential. Instead of panic, this may well represent a temporary recalibration within the markets. With staking infrastructures shoring up ETH and SOL, and BTC’s vast institutional and permanently lost supply, these numbers might indicate a moment of transition rather than doom.

Bitcoin’s Lost Coins and Institutional Vantage

Bitcoin’s situation is unique given its status as both a digital gold standard and a speculative asset. The significant volume of permanently lost BTC ensures a reduced influence of short-term price dips on liquid reserves. Moreover, institutional players with long haul strategies underscore a relative stability, sidestepping impulsive reactions to market hiccups.

The Staking Shield: Ethereum and Solana

Ethereum and Solana’s extensive staked supplies function as de facto market stabilizers. These ecosystems foster strategies that anchor large portions of their circulating supplies outside of immediate trading activity. Staking has matured into a cornerstone of these networks, prioritizing consensus stability over transitory market conditions.

Assessing Risk and Strategic Positioning

Ultimately, investors should analyze these percentages not as harbingers of widespread market contraction, but as indicators of structural characteristics inherent to each network. Both seasoned investors and new entrants should understand that while cryptocurrency markets are inherently volatile, nuanced data interpretation could better guide their strategies.

Emotion Versus Logic in Investing

It’s essential to differentiate between emotion-driven panic and logic-driven analysis. The crypto landscape in 2025 may look turbulent at a glance, but understanding the depths of these circulatory mechanics can illuminate strategic paths forward.

Frequently Asked Questions

Is it wise to invest in Bitcoin if a large portion is held at a loss?

Investing in Bitcoin requires an understanding of its overall ecosystem, including institutional holdings and lost coins, which mitigate immediate sell-off shock. The fundamental perception as digital gold enhances its long-term potential.

How does staking affect Ethereum’s market volatility?

Staking acts as a buffer against Ethereum’s volatility by locking a significant portion of its supply, reducing potential sell-off risks during price downturns and typically resulting in greater price stability.

Why is Solana’s staking ratio significant?

Solana’s high staking ratio is crucial because it demonstrates a strong network commitment to security and agreement protocols, reducing liquid supply and cushioning the network against volatile market conditions.

How should investors interpret high percentages of cryptocurrency supply held at a loss?

While initially concerning, these percentages often reflect in-depth market dynamics, including staked supplies and permanent holdings. They should be interpreted as part of broader market analyses rather than standalone indicators of market turbulence.

Are institutional holdings a stabilizing force for cryptocurrencies?

Yes, institutional holdings often focus on long-term growth, reinforcing market stability as they are less susceptible to short-term volatility, thus cushioning against immediate aggressive price moves.

In conclusion, while the figures of Bitcoin, Ethereum, and Solana held at a loss might initially appear alarming, a thorough understanding of the market intricacies reveals a more stable scenario. As investors navigate these waters, informed decisions rooted in comprehensive analyses will undoubtedly illuminate the most rewarding paths.

Over the past 24 hours, the crypto market has shown strong momentum across multiple dimensions. The mainstream discussion has focused on Coinbase's official entry into the prediction market through the acquisition of The Clearing Company, as well as the intense controversy within the AAVE community regarding token incentives and governance rights.

In terms of ecosystem development, Solana has introduced the innovative Kora fee layer aimed at reducing user transaction costs; meanwhile, the Perp DEX competition has intensified, with the showdown between Hyperliquid and Lighter sparking widespread community discussion on the future of decentralized derivatives.

I. Mainstream Topics

1. Coinbase Acquires The Clearing Company, Officially Entering Prediction Market

This week, Coinbase announced the acquisition of The Clearing Company, marking another significant move to deepen its presence in this field after last week's announcement of launching a prediction market on its platform.

The Clearing Company's founder, Toni Gemayel, and the team will join Coinbase to jointly drive the development of the prediction market business.

Coinbase's Product Lead, Shan Aggarwal, stated that the growth of the prediction market is still in its early stages and predicts that 2026 will be the breakout year for this field.

The community has reacted positively to this, generally believing that Coinbase's entry will bring significant traffic and compliance advantages to the prediction market. However, this has also sparked discussions about the industry's competitive landscape.

Jai Bhavnani, Founder of Rivalry, commented that for startups, if their product model proves to be successful, industry giants like Coinbase have ample reason to replicate it.

This serves as a reminder to all entrepreneurs in the crypto space that they must build significant moats to withstand competition pressure from these giants.

2. Kalshi Launches Kalshi Research and Integrates BSC Network

Regulated prediction market platform Kalshi launched its research arm, Kalshi Research, this week, aimed at opening its internal data to the academic community and researchers to facilitate exploration of prediction market-related topics.

Its inaugural research report highlights Kalshi's outperformance in predicting inflation compared to Wall Street's traditional models. Kalshi co-founder Luana Lopes Lara commented that the power of prediction markets lies in the valuable data they generate, and it is now time to better utilize this data.

Meanwhile, Kalshi announced its support for the BNB Chain (BSC), allowing users to deposit and withdraw BNB and USDT via the BSC network.

This move is seen as a significant step for Kalshi to open its platform to a broader crypto user base, aiming to unlock access to the world's largest prediction market. Furthermore, Kalshi also revealed plans to host the first Prediction Market Summit in 2026 to further drive industry engagement and development.

3. AAVE Token Incentive Controversy Persists as Founders and Whales Increase Holdings Against the Market Trend

The AAVE community recently engaged in heated debates around an Aave Improvement Proposal (AIP) titled "AAVE Tokenomics Alignment Phase One - Ownership Governance," aiming to transfer ownership and control of the Aave brand from Aave Labs to Aave DAO.

Aave founder Stani Kulechov publicly stated his intention to vote against the proposal, believing it oversimplifies the complex legal and operational structure, potentially slowing down the development process of core products like Aave V4.

The community's reaction was polarized. Some criticized Stani for adopting a "double standard" in governance and questioned whether his team had siphoned off protocol revenue, while others supported his cautious stance, arguing that significant governance changes require more thorough discussion.

This controversy highlights the tension between the ideal of DAO governance in DeFi projects and the actual power held by core development teams.

Despite governance disputes putting pressure on the AAVE token price, on-chain data shows that Stani Kulechov himself has purchased millions of dollars' worth of AAVE in the past few hours.

Simultaneously, a whale address, 0xDDC4, which had been quiet for 6 months, once again spent 500 ETH (approximately $1.53 million) to purchase 9,629 AAVE tokens. Data indicates that this whale has accumulated nearly 40,000 AAVE over the past year but is currently in an unrealized loss position.

The founder and whale's increased holdings during market volatility were interpreted by some investors as a confidence signal in AAVE's long-term value.

4. Top Articles: DeFi Curators and Ethereum Annual Summary

In this week's top article, Morpho Labs' "Curator Explained" detailed the role of "curators" in DeFi.

The article likened curators to asset managers in traditional finance, who design, deploy, and manage on-chain vaults, providing users with a one-click diversified investment portfolio.

Unlike traditional fund managers, DeFi curators execute strategies automatically through non-custodial smart contracts, allowing users to maintain full control of their assets. The article offered a new perspective on the specialization and risk management in the DeFi space.

Another widely circulated article, "Ethereum 2025: From Experiment to Global Infrastructure," provided a comprehensive summary of Ethereum's development over the past year. The article noted that 2025 is a crucial year for Ethereum's transition from an experimental project to global financial infrastructure. Through the Pectra and Fusaka hard forks, Ethereum achieved significant reductions in account abstraction and transaction costs.

Furthermore, the SEC's clarification of Ethereum's "non-securities" nature and the launch of tokenized funds on the Ethereum mainnet by traditional financial giants like JPMorgan marked Ethereum's gaining recognition from mainstream institutions. The article suggested that whether it is the continued growth of DeFi, the thriving L2 ecosystem, or the integration with the AI field, Ethereum's vision as the "world computer" is gradually becoming a reality.

II. Mainstream Ecosystem Updates

1. Solana: Launches Kora Fee Layer and propAMM Data Research

The Solana Foundation engineering team released a fee layer solution called Kora this week.

Kora is a fee relayer and signatory node designed to provide the Solana ecosystem with a more flexible transaction fee payment method. Through Kora, users will be able to achieve gas-free transactions or choose to pay network fees using any stablecoin or SPL token. This innovation is seen as an important step in lowering the barrier of entry for new users and improving Solana network's availability.

Additionally, a deep research report on propAMM (proactive market maker) sparked community interest. The report's data analysis of propAMMs on Solana like HumidiFi indicated that Solana has achieved, or even surpassed, the level of transaction execution quality in traditional finance (TradFi) markets.

For example, on the SOL-USDC trading pair, HumidiFi is able to provide a highly competitive spread for large trades (0.4-1.6 bps), which is already better than the trading slippage of some mid-cap stocks in traditional markets.

Research suggests that propAMM is making the vision of the "Internet Capital Market" a reality, with Solana emerging as the prime venue for all of this to happen.

2. Perp DEX: Hyperliquid vs. Lighter Competition Intensifies

The competition in the perpetual contract DEX (Perp DEX) space is becoming increasingly heated.

In its latest official article, Hyperliquid has positioned its emerging competitor, Lighter, alongside centralized exchanges like Binance, referring to it as a platform utilizing a centralized sequencer. Hyperliquid emphasizes its transparency advantage of being "fully on-chain, operated by a validator network, and with no hidden state."

The community widely interprets this as Hyperliquid declaring "war" on Lighter. The technical differences between the two platforms have also become a focal point of discussion: Hyperliquid focuses on ultimate on-chain transparency, while Lighter emphasizes achieving "verifiable execution" through zero-knowledge proofs to provide users with a Central Limit Order Book (CLOB)-like trading experience.

This battle over the future direction of decentralized derivatives exchanges is expected to peak in 2026.

Meanwhile, discussions about Lighter's trading fees have surfaced. Some users have pointed out that Lighter charged as much as 81 basis points (0.81%) for a $2 million USD/JPY forex trade, far exceeding the near-zero spreads of traditional forex brokers.

Some argue that Lighter does not follow a B-book model that bets against market makers, instead anchoring its prices to the TradFi market, and the high fees may be related to the current liquidity or market maker balance incentives. Providing a more competitive spread for real-world assets (RWA) in the highly volatile crypto market is a key issue Lighter will need to address in the future.

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Stablecoin payments have reached nearly half of total transaction volume, but are highly concentrated in a few institutional wallets: the top 1000 addresses contributed to about 85% of the transfer volume. While P2P transactions are numerous, their share of the total amount is significantly low.

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