Bitcoin retests $73K as 44% of supply sinks below cost, erasing post–election night gains

Bitcoin’s slide to roughly $73,000 has unwound the post–election night rally tied to Trump’s win. The headline price is one thing; the more telling development is on-chain. A Glassnode analyst said about 44% of circulating supply now sits below its cost basis after an approximately 30% decline over the past month.

The share of supply “underwater” is the metric to respect here. It converts a chaotic tape into a map of incentives. When nearly half the coin supply is at a loss, the market’s microstructure shifts: liquidity becomes conditional, time horizons compress, and rallies start encountering motivated sellers who simply want to get back to even.

This is why the $73K test matters less than where the cost basis clusters are. Underwater holders often anchor to their entry price; as price approaches those levels, supply tends to reappear. That creates resistance without any grand narrative—just human behavior codified in UTXOs. Conversely, as drawdowns deepen, the marginal seller exhausts, and price can form durable floors when remaining holders demonstrate high conviction.

Technologically, Bitcoin itself is unchanged—blocks continue, issuance is predictable, settlement remains final. What does change is the realized distribution: how coins are held across profit and loss. That ledger of cost basis—transparent, verifiable—lets professionals quantify crowd stress in a way you simply can’t in equities. The 44% figure is not a vibe; it’s a measurable inversion of cost basis that will govern the next few weeks of liquidity and slippage.

The business implications are straightforward. Desks that internalized flow during the prior uptrend now face a different inventory problem: more sells on strength, less chase on breakouts. ETF market makers and basis traders adjust hedges around these profit/loss bands, which can flatten intraday ranges and then, suddenly, accelerate moves when those bands break. In that environment, narratives—policy hopes, macro prints—act as catalysts, but order books are increasingly ruled by breakeven supply.

Psychology is doing heavy lifting too. Loss aversion often forces otherwise patient holders to become tactical: “I’ll sell the first pop.” That mindset builds invisible ceilings. It can flip quickly, though. If price reclaims and holds above dense cost clusters, yesterday’s would‑be sellers become reluctant to part with inventory, and momentum returns with fewer asks overhead. The same metric that speaks to fragility can signal a clean runway when it normalizes.

There’s also an ethical layer to how this data is used. “Underwater” can read like a scarlet letter, and some commentators lean into fear to drive engagement. The better takeaway is conditional: 44% represents potential energy, not destiny. Interpreting on-chain loss correctly means acknowledging path dependence—liquidity, catalysts, and participant composition—without sensationalism.

What I’m watching next: - Whether the share of underwater supply falls because price recovers or because coins change hands at a loss—two very different signals. - The behavior of short-term cohorts near their cost basis; acceptance above those levels typically reopens momentum. - Liquidity depth around realized price bands; thin books plus underwater supply can still produce sharp squeezes.

Price revisiting $73K and wiping the post–election night gains is a clean headline. The more durable story is the cost-basis inversion. Until the underwater share recedes, expect rallies to negotiate with breakeven sellers and pullbacks to test the patience of those who have already adjusted. That’s not doom; it’s a roadmap for how supply will behave, and it’s the map I’d trade against.