The average entry price for Bitcoin (BTC) investors currently holding unrealized losses has significantly decreased, according to recent blockchain data analysis. Market analyst Murphy reported on April 5, 2026, that the average cost of all "underwater" BTC holdings has fallen to $66,600. This suggests that a substantial portion of the high-level resistance has been mitigated as investors who entered at peak prices likely exited their positions during recent market corrections, effectively lowering the collective break-even point for the remaining holders.
Analyzing the Deviation Coefficient and Market Bottoms
A critical metric in determining market cycles is the 30-day average deviation coefficient, which measures the gap between the current market price and the average cost of loss-making positions. Currently, this coefficient stands at 1.4. Historically, Bitcoin has only reached an "absolute bottom" when this deviation coefficient exceeds 2.0, a scenario where the BTC price is less than half of the underwater cost basis.
- Current Underwater Average: $66,600
- Current Deviation Coefficient: 1.4
- Historical Bottom Threshold: 2.0 or higher
- Theoretical Bottom Target: $33,300
The deviation coefficient provides a mathematical framework to evaluate how far the market must stretch before reaching a point of maximum exhaustion for sellers.
Impact of Recent Liquidation Events
The reduction in the average underwater cost is attributed to two sharp declines observed in late 2025 and early 2026. During these periods, many high-position "trapped" investors chose to cut their losses, transferring their assets to new buyers at lower price points. This churn has streamlined the path to recovery, as the market now only needs to return to the $70,000 level to bring the vast majority of underwater holdings back into a state of profit.
Under the current loss structure, as long as BTC rises back to $70,000, all underwater holdings will break even on average. To reach a historical bottom coefficient of 2.0, Bitcoin would need to fall to $33,300 in this round.
The current data indicates that while the market is not yet at a historical "absolute bottom" relative to previous bear cycles, the structural overhead of expensive Bitcoin has been significantly reduced. This shift in the on-chain cost basis reflects a healthier distribution of assets as the Bitcoin blockchain prepares for its next phase of price discovery.
Frequently Asked Questions
Quick answers to the most common questions about this topic.
For educational purposes only. Nothing here constitutes financial or investment advice. Crypto markets are highly volatile — always DYOR before making any decisions.
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