On-chain data shows that the Bitcoin crash resulted in record realized losses of $ 3.2 billion. The asset also saw $1.5 billion in daily net losses at the time.
The historic realized loss in Bitcoin’s history occurred when the BTC price dropped from $70,000 to $60,000 on February 5. The data came from Glassnode’s Entity-Adjusted Realized Loss metric, which tracks the USD value of coins moved that were sold below their acquisition price.
Could Bitcoin’s drop be a sign of capitulation?
The realized loss on February 5 exceeded the $2.7 billion recorded during the LUNA collapse in 2022. The capitulation occurred rapidly and with heavy volume, racking losses from many Bitcoin holders.
The sell-off was also triggered by a wave of liquidations, forcing traders to close positions to reduce losses. On-chain data showed that more than $1 billion in BTC positions were liquidated that day. Tony Sycamore, an analyst at IG Australia, stated that the drop to $60,000 was a capitulation-type low, arguing that it’s a catalyst for a sustained rebound.
Source: Glassnode. Entity-Adjusted Realized Loss chart showing Bitcoin’s realized losses.Bitcoin has slightly rebounded in the past few days, trading at $67,543 at the time of publication. BTC has also surged by more than 1.7% over the past 24 hours, but has lost nearly 29% over the past 30 days. Bitcoin has also lost more than half of its value in three months from its all-time high of above $126,000 in October.
Market participants are looking at Bitcoin’s historical pattern of rallying to new all-time highs after its four-year halving. Steven McClurg, CEO of Canary Capital, said he expects BTC to drop to around $50,000 in the summer before rebounding in the fall.
Nick Puckrin, Investment Analyst and Co-Founder of Coin Bureau, acknowledged that the crypto market is currently in full capitulation mode. He also argued that the sell-off is not a short-term correction, but will take months. The entire crypto market has struggled for months since the record crash last October, leaving investors less keen on the market.
Deutsche Bank analysts argued that the broader crypto market decline was driven by massive withdrawals from institutional ETFs. On-chain data showed that ETFs recorded outflows of more than $3 billion in January, with $2 billion and $7 billion outflows recorded in December and November, respectively.
Stanchart lowers Bitcoin forecast for 2026
Standard Chartered’s Head of Digital Asset Research, Geoff Kendrick, argued that Bitcoin’s downturn is driven by weaker U.S. economic momentum and lower expectations for a Fed rate cut. He also noted that declining crypto ETF holdings have erased a key source of demand in the market.
Kendrick expects Bitcoin to drop to $50,000 before rebounding later in the year, arguing that crypto prices will undergo a final capitulation in the next few months. The financial institution also lowered its Bitcoin target for 2026 from $150,000 to $100,000, citing the risk of further investor capitulation.
The drop in crypto prices comes as Wednesday’s U.S. jobs report dashed hopes that the Federal Reserve would cut interest rates at its next policy meeting. Fed Chair Jerome Powell also signaled earlier this month that the Fed would maintain a data-dependent approach in adjusting rates at around 3.50%-3.75%.
The CME FedWatchTool revealed that there’s a 92.1% probability that the central bank will cut rates by a quarter percentage point in its March 18 policy meeting. U.S. President Donald Trump also nominated Kevin Warsh, expected to be hawkish towards the industry, to lead the Fed.
Source: https://www.cryptopolitan.com/bitcoin-leads-largest-realized-loss/
