Bitcoin is going through a painful stretch.
The world’s largest cryptocurrency, Bitcoin, is now down about 50% from its all-time high. And the pressure has been building for months.
Long-term holders still in profit — but shrinking
According to CryptoQuant analyst Darkfost, long-term holders (LTHs) are still sitting on an average profit of around 74%. That sounds strong. But the cushion is getting thinner as the price moves closer to their average cost basis, which sits near $39,000.
In past bear markets, prices have usually dropped below that long-term holder cost basis. When that happens, it often triggers panic selling — also known as capitulation. Historically, that phase has come with realized losses of around 20%.
And only after that kind of washout has the market truly reset and entered a new bull phase.
Selling pressure building
Data from Glassnode shows that the 90-day moving average of the Realized Profit/Loss Ratio has dropped below 1. In simple terms, more investors are locking in losses than profits.
Glassnode says that in previous cycles, this “loss-heavy” environment has lasted at least six months before real recovery begins.
Meanwhile, analyst James Check pointed out that Bitcoin has printed nearly five straight red monthly candles. That streak followed a huge volatility spike — with one-week realized volatility jumping above 150%. That level is usually linked to panic moments in the market.
At the same time, Bitcoin’s weekly RSI has dropped into one of the most oversold zones in its history, especially around the $60,000–$65,000 range.
Half of supply now underwater
Analyst James Van Straten highlighted another key signal: about 10 million BTC are now sitting at a loss. That’s roughly half of the nearly 20 million coins currently in circulation.
Historically, when supply in loss reaches these levels, it has often marked major bear market bottoms. It reflects heavy capital destruction — a point where weak hands are largely flushed out.
What happens next?
Bitcoin saw a small rebound during early Asian trading hours. But overall sentiment remains bearish.
Technically, the price has formed another lower high — a classic sign of a downtrend — while holding onto a key support level for now.
The big question is whether this is just another bounce in a larger downtrend… or the slow formation of a long-term bottom.
For now, the market still feels cautious.v
