A key on-chain metric shows a chunk of Ethereum supply sitting underwater — held at prices above current market value — at levels not seen since the FTX collapse in November 2022. Glassnode's "supply in loss" measure tracks the amount of ETH whose on-chain cost basis is higher than the current price. The reading has climbed back to the zone that marked the post-FTX cycle low, reigniting debate about whether seller exhaustion is setting in.
What the numbers say
The supply-in-loss metric looks at every UTXO or address balance and checks whether the last move price is below the current spot. Right now a large share of Ethereum supply is in that red zone. Glassnode notes that the last time this share was this high was right after FTX blew up, when ETH changed hands well below $1,200.
A high underwater supply doesn't automatically mean a bounce is coming — but it can signal that most people who were going to sell already have. That dynamic, known as seller exhaustion, has historically preceded reversals when combined with other signals.
Why the FTX comparison cuts both ways
The post-FTX period is emotionally powerful in crypto. That was the absolute bottom of the last bear market, and anyone who bought there made a fortune. But Glassnode's data comes with a warning: market structure, liquidity profiles, and institutional exposure are all different now. The composition of holders — more ETFs, more corporate treasuries, more DeFi locked collateral — means the same metric may not resolve the same way.
Some traders are already calling the metric a bottom signal. Others say it's a trap until price confirms.
What needs to happen next
The on-chain data alone isn't enough to call a bottom. Traders looking at this signal want to see price stabilization — either a clear reclaim of a lost support level or a sustained pickup in spot demand. Without that, the underwater supply metric is just a curiosity: interesting, but not actionable.
The clock is ticking. If ETH stays in this range for another week or two, more supply could tip into loss, pushing the metric even higher. That wouldn't be a buy signal — it would mean the pain trade is still on.
