Bitcoin hits highest realized losses since FTX collapse
Short-term holders were the main sellers during the drop
Market sentiment shows rising fear and uncertainty
Bitcoin recently experienced its sharpest realized losses since the FTX collapse in late 2022. This downturn was not just another price dip — it marked a significant point of fear-driven selling, particularly among short-term holders. These investors, who typically buy and sell within weeks or months, were the main contributors to the sudden spike in realized losses.
Realized losses occur when investors sell their Bitcoin for less than they paid for it, locking in the loss. According to on-chain data, these losses reached levels not seen since the FTX debacle — a major moment of panic in the crypto space.
Market Conditions Mirror Past Fear Cycles
During the recent sell-off, Bitcoin’s price drop led many short-term holders to exit their positions, realizing heavy losses. Analysts suggest that these investors were likely hoping for a quick rebound but chose to sell once the downtrend deepened, fearing further losses.
Long-term holders, on the other hand, have shown more resilience. Their on-chain activity remained relatively stable, indicating confidence in Bitcoin’s long-term value. This difference between short-term and long-term behavior paints a clearer picture of market sentiment: short-term fear versus long-term conviction.
NEW: Bitcoin’s drawdown triggered the biggest spike in realized losses since FTX, driven mainly by short-term holders, per @glassnode. pic.twitter.com/pm0MbzyL3A
— Cointelegraph (@Cointelegraph) December 5, 2025
What This Means for Bitcoin’s Near Future
Spikes in realized losses are often a signal of market capitulation — a point when panic selling may reach its peak. Historically, such events have been followed by price consolidation or recovery. However, with Bitcoin still navigating macroeconomic uncertainties and upcoming regulatory hurdles, volatility is expected to persist.
For investors, understanding who is selling — and why — can offer valuable insight into where the market may head next. The current drawdown, while painful for many, could eventually set the stage for a healthier rebound once short-term pressures ease.
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