The Bitcoin market appears to be riddled with an increasing amount of sell-side pressure, as its recent price action reveals bears’ dominance. Interestingly, another on-chain evaluation suggests that the current market movement may be a direct effect of rising panic-induced sales.
$1.7B Realized Losses Vs $605M Realized Gains
In a Quicktake post on the CryptoQuant platform, GugaOnChain shared that the Bitcoin market has been in a capitulation phase in recent days. This on-chain observation revolves around the Bitcoin Realized Profit and Loss ($) metric.
For context, this metric tracks the actual profits (in US dollars) and losses investors realize—or lock in—whenever they offload their Bitcoin holdings to exchanges.
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GugaOnChain highlighted that about $1.705 billion worth of BTC has been realized in losses by market participants. On the other hand, a relatively smaller amount, totaling approximately $605 million, was reportedly realized in gains.
Source: CryptoOnchainThis disproportionate distribution in losses, as against the profits acquired, puts the Loss/Gain ratio at a 2.82 reading. This means that, for every dollar made in profit, almost 3 dollars are lost.
Looking at the bigger picture, the analyst pointed out that 74% of the total realized volume leans towards the red side of the market, leaving a mere 26% of the Bitcoin market in profits. When realized losses surge rapidly to overcome gains, it is often interpreted as a sign of capitulation.
Historically, extreme capitulation events tend to set the pace either for price recovery or even deeper downside movement. These two possibilities, however, remain dependent on the integrity of available inflection points.
Bulls Must Defend These Price Levels Or Risk Deeper Corrections
Although the market odds currently seem stacked against the bulls, as the price takes on a bearish structure, the analyst also identified a few important zones that may determine Bitcoin’s next direction. GugaOnChain explained that, in the scenario where the bulls continue to bleed, the next price level presenting an opportunity of redemption lies around $71,450.
This specific price level is critical, as it represents the realized price for investors who have acquired Bitcoin for about 12–18 months.
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Citing a more extreme scenario, the online pundit revealed that the next key support sits at $58,940. This zone is important as it is the realized price for investors whose coins are within the 18-month to 2-year age range.
On the weekly timeframe, however, price zones around $80,000 and $74,000 appear significant enough for a short-term price recovery. A bullish reversal could take place if these price levels were to meet the present downturn with significant opposing strength.
As of this writing, Bitcoin is valued at around $89,331, reflecting no significant movement in the past 24 hours.
Featured image from iStock, chart from TradingView
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