Bitcoin Faces One Of Its Worst Capitulations

Within a few sessions, bitcoin has plunged back into a turbulence zone rarely seen since previous major crashes. On-chain data reveals $2.3 billion in realized losses over seven days, a shock that ranks this episode among the most violent in its recent history. This wave of capitulation follows a brutal correction of BTC, falling heavily after its peak above $126,000.

Realized losses comparable to previous major crashes

The central information of this market episode rests on realized losses. The IT Tech analyst specifies that bitcoin has suffered “$2.3 billion in realized losses” on a seven-day moving average.

He notes that this is “one of the three to five largest capitulation events in bitcoin’s history”, a direct comparison with the most painful phases of previous cycles.

The reported facts are as follows :

• $2.3 billion in realized losses over 7 days, according to on-chain data ;
• An event ranked among “the three to five largest capitulation episodes” according to IT Tech ;
• A correction of about 50 % since the historic peak above $126,000 recorded in October ;
• A return of the price to a zone around $60,000 to $66,000 at the time of analysis.

Realized losses correspond to bitcoins sold below their acquisition price. This metric reflects a significant volume of loss sales and signals an advanced moment of market stress.

Pressure on short-term holders

Beyond the raw losses figure, data shows that pressure mainly comes from short-term holders. Investors who bought bitcoin between approximately $80,000 and $110,000 now find themselves forced to liquidate their positions at a loss, fueling the downward spiral. This internal market redistribution illustrates a transfer of bitcoins from fragile hands to potentially more patient actors.

Analysts also emphasize that the $55,000 zone historically corresponds to cyclical lows. Although the price has not necessarily confirmed this threshold as a definitive floor, the proximity of this zone fuels discussions about a possible bottom formation process.

Capitulation, by definition, occurs when the majority of short-term actors yield under pressure, often after a series of liquidations and significant realized losses.

This wave of capitulation brings the market back to face its recent excesses. Although realized losses reach historic levels, the bitcoin price now moves within a pivotal zone. It remains to be seen whether this purge marks a simple clearing of fragile positions or the beginning of a more sustainable consolidation cycle.