Analyst: Currently, nearly 40% of BTC holdings have entered a loss state, reaching the target level of the first round of declines in several previous bear market cycles

On-chain data analyst Murphy posted on social media that the 7-day average of BTC's Profit Supply Percentage (PSIP) has fallen below 70%, indicating that this round of decline has put nearly 30% of the chips across the chain into a loss state. If we exclude long-term inactive, lost, and BTC similar to Satoshi's addresses, this ratio is expected to exceed 40%.

Murphy further stated that in the first round of declines during the transition from bull to bear over the past 10 years, PSIP has always reached the current position, followed by a rebound after extreme emotional pressure. This was the case in both 2018 and 2020. Notably, 2020 also saw the addition of the Black Swan event on May 19. However, even if a rebound occurs, it may not be able to re-establish an upward trend, as there are too many chips in the market waiting to exit during the rebound.