Short-term Bitcoin holders are currently realizing over $900 million in daily losses. This figure is now higher than the daily losses recorded during two of the most catastrophic events in crypto history — the China mining ban in 2021 and the FTX collapse in 2022.
This surge in realized losses signals intense fear and capitulation in the market, especially from investors who purchased BTC in the past few weeks or months. Typically, such levels of realized loss indicate a sell-off among newer market participants who entered at higher price levels.
Exceeding Past Crises: A New Scale of Capitulation
During the China mining ban, Bitcoin’s price plummeted as over half of its mining power went offline. Similarly, when FTX collapsed, the market was rocked by a loss of trust and a liquidity crunch. But now, the daily financial pain experienced by short-term holders has surpassed both these events, making this the most severe phase for recent BTC buyers.
While Bitcoin’s price may not have dropped as dramatically as in those past crises, the current situation highlights a shift in investor behavior — more participants are exiting at a loss, and faster.
ALERT: Short-term Bitcoin holders are now realizing over $900M in daily losses, surpassing both the China mining ban and the FTX collapse in scale. pic.twitter.com/b6XOa0r9yg
What This Means for the Market
This spike in losses could be interpreted as a bottoming signal, where weak hands are flushed out of the market. Historically, such high levels of realized losses have often preceded price rebounds, as the market resets and stronger holders accumulate.
However, in the short term, this data paints a grim picture for Bitcoin momentum. The selling pressure from short-term holders creates downward pressure on the price, and unless long-term investors step in with strong buying activity, BTC may remain under stress.