Bitcoin Unrealized Losses Reach 22% – Still No Capitulation Phase

Overview

Bitcoin is currently facing significant challenges as it struggles to recover the $80,000 mark amidst ongoing selling pressure and market uncertainty. The price dynamics suggest that the cryptocurrency is navigating a more profound structural shift rather than merely experiencing a short-term correction. Recent on-chain data indicates that while unrealized losses are increasing, the market has not yet entered a capitulation phase.

Current Market Conditions

Bitcoin’s price has been under pressure following a decline from approximately $95,000 to around $78,000. This decline has resulted in unrealized losses for holders rising sharply, now sitting at about 22%. This figure has tripled since January, highlighting a growing discomfort among investors. However, it remains significantly lower than the historical levels of 40–60% typically associated with capitulation during previous bear markets in 2019 and 2023.

Analyst Axel Adler points out that Bitcoin has been in a bear cycle since October 2025 and is currently in a correction phase following a local peak near $125,000. The market’s price action is fragile; rebound attempts have failed to gain momentum, indicating that traders may still be digesting the broader implications of this market shift.

The LTH/STH SOPR Ratio, which compares the profitability of coins being spent by long-term holders to those of short-term holders, has also shown notable changes. This ratio has decreased by around 40% from its peak, suggesting that long-term holders are less willing to sell at a loss. Despite the decline, the ratio remains above the critical threshold of 1.0, which historically signals capitulation for short-term holders. A sustained move below this level could indicate a more severe market downturn.

Technical Analysis

Recent price action on the 12-hour chart indicates that Bitcoin remains under structural pressure. Following a sharp sell-off from the mid-$90,000s, Bitcoin broke below several key moving averages, confirming a bearish trend rather than a simple pullback. The aggressive downward movement was accompanied by increased trading volume, suggesting that forced selling and liquidation were prevalent instead of orderly profit-taking.

Since reaching a local low near $78,000, Bitcoin has attempted a modest rebound, but this bounce appears technically weak. The cryptocurrency continues to trade below both short-term and medium-term moving averages, which are now acting as dynamic resistance. Previous support levels in the $88,000–$90,000 range have flipped to become a supply zone, further complicating any upside attempts.

The current consolidation phase seems more aligned with a relief pause rather than a reversal of the prevailing trend. While momentum has slowed, there is no clear indication of sustained demand or bid absorption to support a recovery. As long as Bitcoin remains below the descending moving averages, the risk of further declines persists.

From author

The current state of Bitcoin presents an intriguing narrative as it grapples with significant unrealized losses and market pressures. The indicators suggest a complex environment where investor confidence is waning, yet capitulation has not yet occurred. This could imply that while the market is under stress, there might still be room for recovery if certain thresholds are met.

Impact on the crypto market

• Bitcoin’s unrealized losses have reached approximately 22%, signaling growing discomfort among investors.
• The LTH/STH SOPR Ratio has decreased significantly, indicating reduced profitability for both long-term and short-term holders.
• The market remains in a bearish regime, with price action suggesting entrenched selling pressure rather than a temporary pullback.
• The failure of Bitcoin to reclaim key resistance levels raises concerns about potential further declines.
• Current market conditions suggest a mid-cycle stress phase rather than a terminal bear-market bottom, indicating that the situation may evolve yet.