Is the Bitcoin Bottom In? Glassnode Flags Massive Realized Losses as BTC Tests $67K

Bitcoin Faces Intensified Selling Pressure: Realized Losses Surge as Capitulation Deepens

Bitcoin (BTC) continues to grapple with mounting downside momentum, as on-chain indicators from Glassnode reveal accelerating realized losses and forced exits from distressed holders. The shift from consistent profitability during the prior uptrend to widespread value destruction underscores a phase of deepening capitulation, reminiscent of late-2022 dynamics.

This transition has intensified selling pressure, with liquidity thinning and newer market participants compelled to realize losses amid narrowing profit opportunities.

Realized Losses Accelerate, Signaling Holder Distress

The 3-day simple moving average (SMA) of net realized profit/loss has plunged to around –$317 million per day, reflecting a sharp pivot from positive prints that characterized the broader bull phase. Earlier periods featured sustained profitability, occasionally interrupted by spikes in realized profits during euphoria-driven sell-offs at local tops.

Recent data shows realized losses expanding significantly. The 7-day SMA of realized losses has climbed above $1.26 billion per day in the current contraction, with some spikes pushing daily figures beyond $2.4 billion during acute phases. Single-day prints have approached or exceeded $5 billion in extremes, rivaling capitulation levels from late 2022.

These elevated losses indicate coins moving at steeper discounts relative to their cost basis, amplifying balance sheet stress across holder cohorts. Losses as a proportion of market cap are rising, pointing to broader value erosion rather than isolated distress.

The realized profit/loss ratio (90-day SMA) has declined to approximately 1.5, trending closer to 1—a threshold historically associated with widespread capitulation where losses dominate profit-taking.

Parallels to December 2022 Bear Market Phase

The current setup mirrors conditions in December 2022, when cascading liquidations and credit events drove realized losses below –$300 million per day. Forced selling prevailed amid tightening liquidity, followed by gradual stabilization as patient accumulation emerged and weak hands exited.

While downside spikes appear to be moderating in size and frequency—suggesting potential stabilization—persistent sub-zero readings confirm ongoing supply transfer to stronger, conviction-driven holders. This classic capitulation dynamic often marks exhaustion points, though the process remains incomplete.

Leverage Dynamics: Rising Long Bias Amid Vulnerability

Derivatives markets show a building long bias, with aggregate long/short ratios trending higher and frequently exceeding 2.5–3.0 for Bitcoin. This contrasts with altcoins, where ratios hover closer to 1.5–2.0, highlighting BTC's perceived relative safety.

However, the increase has occurred through sharp, inconsistent spikes rather than steady conviction, indicating reactive positioning. Leverage concentration is thickening, heightening systemic sensitivity to liquidations. Liquidation bands cluster tightly below current ranges, raising the risk of cascading long squeezes on modest drawdowns.

Funding rates and open interest trends suggest re-leveraging within the downtrend, rather than healthy deleveraging, leaving traders exposed to further pressure.

Current Bitcoin Price and Market Snapshot

As of February 5, 2026, Bitcoin trades around $68,000 to $69,000, having dipped as low as $67,000–$69,000 in recent sessions—its weakest levels since late 2024. The asset has erased substantial portions of gains from its October 2025 peak above $126,000, reflecting a roughly 40–45% correction amid persistent bearish control.

Trading activity remains elevated, driven by liquidations and de-risking, though spot demand appears weak with ETF outflows contributing to the pressure.

Why This Capitulation Phase Matters

Deepening realized losses and leverage vulnerabilities signal a market under stress, where fear-driven exits dominate. Historically, such phases exhaust marginal sellers, paving the way for recovery once supply shocks subside and fresh demand stabilizes price.

The combination of accelerating losses, thinning liquidity, and crowded longs increases near-term downside risks, potentially testing lower supports like the realized price near $55,800 or macro projections toward $50,000–$60,000 in extended scenarios.

Yet extremes in realized loss spikes have often coincided with seller exhaustion and short-term inflections. If capitulation runs its course—transferring supply to resilient hands—Bitcoin could find a base for stabilization, similar to post-2022 patterns.

Traders face heightened caution in this environment. While long bias persists among some participants viewing BTC as a safer haven, the structural weaknesses demand vigilance against cascading events. The path ahead depends on whether selling pressure fully exhausts or if macro improvements spark renewed inflows.

Todor Tsonev publication: "Is the Bitcoin Bottom In? Glassnode Flags Massive Realized Losses as BTC Tests $67K" was written for 24crypto.news

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