Felix Pinkston
Feb 04, 2026 19:15
Glassnode analysis reveals BTC’s MVRV Z-Score at lowest since Oct 2022, with $1.26B daily realized losses and ETF outflows signaling deeper correction ahead.
Bitcoin’s 26% plunge from $98,000 to $72,000 over the past month has triggered the most severe on-chain stress readings since the FTX collapse, according to Glassnode’s latest weekly report. The data paints a picture of a market in full capitulation mode, with institutional demand evaporating just as forced selling accelerates.
The numbers are stark. BTC’s MVRV Z-Score—a key profitability metric comparing market value to realized value—has compressed to levels not seen since October 2022. Meanwhile, the 7-day average of realized losses has surged above $1.26 billion daily, with single-day spikes exceeding $2.4 billion during the worst of the selling.
Structural Breakdown Confirmed
Price has now fallen decisively below the True Market Mean at $80,200, a level that historically acts as the final support during shallow corrections. This metric strips out dormant coins and early miner holdings to show where active capital actually sits. Losing it, as Glassnode analyst Chris Beamish notes, “confirms a deterioration that has been building since late November.”
The configuration increasingly resembles early 2022—that uncomfortable period when Bitcoin transitioned from choppy range-bound trading into a full bear market. The Realized Price around $55,800 now defines the lower boundary where long-term holders historically step back in.
Demand Has Vanished
Perhaps more troubling than the selling itself is who isn’t buying. Spot volumes remain “structurally weak” despite the dramatic price decline. The 30-day volume average barely lifted even as BTC shed a quarter of its value—a textbook demand vacuum.
Institutional flows have flipped negative across the board. Spot ETFs, corporate treasuries, and government-linked buyers are all pulling back. This marks a stark reversal from the expansion phase when these allocators provided consistent bid support.
“With institutional and treasury demand no longer providing a reliable bid, downside risk remains elevated,” the report states. Any bounces should be treated as corrective rather than trend-reversing until these flows stabilize.
Leverage Getting Flushed
Derivatives markets are experiencing their largest long liquidation cascade of the entire drawdown. The flush-out accelerated as price broke through the mid-$70,000s, with forced selling amplifying volatility and widening intraday ranges.
Options markets tell the same story. Short-dated implied volatility spiked toward 70% during the retest of $73,000, with one-week IV jumping roughly 20 points in two weeks. Downside skew has steepened further—traders are paying up aggressively for put protection rather than positioning for recovery.
The 1-week volatility risk premium has turned negative for the first time since early December, dropping to around -5 from +23 a month ago. When implied vol trades below realized vol, gamma sellers start bleeding, adding mechanical pressure rather than absorbing it.
Where’s the Floor?
On-chain distribution data shows notable accumulation between $70,000 and $80,000, with a particularly dense supply cluster between $66,900 and $70,600. These cost-basis concentrations often act as short-term shock absorbers where sell-side pressure meets responsive demand.
BTC traded at $76,180 at press time Wednesday, up 4% in 24 hours after dipping near $74,600 over the weekend. The bounce came as precious metals resumed their surge, though correlation with risk assets remains elevated.
Pantera Capital’s Dan Morehead reiterated his long-term bullish stance this week, arguing Bitcoin will “massively” outperform gold over a decade. But for now, the on-chain verdict is clear: until spot demand returns in size, any rallies face immediate resistance at that $80,200 True Market Mean overhead.
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