#Bitcoin is showing clear signs of market stress, as Glassnode data confirms one of the largest capitulation events in the past two years.
The spike indicates a dramatic rise in forced selling, as traders and investors rush to de-risk amid heightened volatility. For context, Bitcoin’s price has dropped over 11% today, trading at $66,900 at press time. Bitcoin last traded near this level in November 2024, just before Donald Trump won his reelection.
Key Points
Bitcoin drops 11% to $66,900 amid second-largest capitulation in 2 years.
Forced selling spikes as traders rush to de-risk in volatile market conditions.
Realized losses hit $889M/day, the highest since November 2022.
Spot price falls below key on-chain cost levels, pressuring short-term holders.
Capitulation Metric Signals Elevated Stress
According to Glassnode, capitulations typically occur when traders rush to exit positions, forcing leveraged players out of the market. Recent on-chain data shows this metric jumping as Bitcoin pulled back from its highs.
Notably, #Bitcoin is now down more than 47% from its all-time high of $126,200. Historically, these moments signal a market reset, with weaker holders selling and long-term investors reconsidering their positions.
Realized Losses Hit Highest Level Since 2022
Pressure intensified on February 4, when Bitcoin’s Entity-Adjusted Realized Loss (7-day SMA) climbed to $889 million per day—the highest daily loss realization since November 2022.
This metric reflects actual on-chain losses incurred when coins are sold below their acquisition price. The surge indicates that a significant portion of the market capitulated at a loss, reinforcing the scale of the ongoing de-risking phase.
Spot Price Drops Below Key On-Chain Cost Levels
Glassnode noted that as #Bitcoin plunged to $69,700, it fell well below several major on-chain price models, highlighting how deeply the price has undercut recent investor cost bases. At the time of the report, the data showed:
Short-Term Holder (STH) Cost Basis: $94,000
Active Investors Mean: $86,800
True Market Mean: $80,100
Spot Price: $69,700
Realized Price: $55,600
Meanwhile, at press time, Bitcoin's price had fallen even lower, suggesting the metric may now be worse. With the spot price trading below the average cost of recent buyers, many short-term holders are now underwater. This condition historically amplifies volatility and emotional selling, partially explaining why BTC’s price has dipped over 11% today.
What This Means for Bitcoin Next Move
While capitulation events are often painful, they have historically helped reset market structure. Periods of heavy realized losses and forced selling can pave the way for stabilization once excess leverage is flushed out.
For now, Glassnode’s data suggests Bitcoin remains in a high-stress environment. Market participants are closely watching for support levels where selling pressure could ease.