Bitcoin Faces Heavy Selling Stress as Realized Losses Hit $1.26 Billion Daily

Bitcoin’s current bear phase is showing deeper cracks after the price failed to regain the short-term holder cost basis near $94,500. Glassnode noted on Feb. 4 that profitability has reset, spot demand remains weak, and leverage is now unwinding across derivatives markets.

A major shift occurred as Bitcoin dropped below the True Market Mean, a level that tracks the average cost basis of coins actively circulating.

This metric excludes long-dormant supply, such as lost coins, early miner holdings, and Satoshi-era balances. In past cycles, this level often acted as a final line of defense during shallow declines.

As per the analysis, the weakness in the market has been increasing since late November. Glassnode states that the current market is similar to that of early 2022, when Bitcoin changed from small market movements to a more prominent bear market.

The True Market Mean, currently around $80,200, has turned into a resistance level above the market price. On the flip side, the Realized Price is close to $55,800.

Source: Glassnode

Bitcoin Eyes Key Support Zones After Structural Breakdown

With the support removed, people are looking at regions where purchases might help to stabilize prices. One of the most important on-chain metrics is the UTXO Realized Price Distribution, which indicates where the last purchases of coins took place.

Source: Glassnode

Currently, new buyers have been accumulating at the $70,000 to $80,000 level. Below that, there is a region of heavy supply between $66,900 and $70,600.

Stress among investors is rising fast. Realized losses, or sales of coins at a loss, are up. The 7-day average is over $1.26 billion per day. In a previous bounce from around $72,000, realized losses briefly exceeded $2.4 billion, which can indicate that forced selling is dwindling.

Source: Glassnode

Relative Unrealized Loss is also above its average of about 12%. While high, it is not in the extreme bear market levels of 65% to 75% seen at major lows in 2018 and 2022.

Off-Chain Demand Vacuum Signals Weakness

However, there is still weakness in off-chain activity. There is a lack of activity in spot markets and futures markets, resulting in what Glassnode terms a demand vacuum. Even as Bitcoin fell from $98,000 to the low $70,000s, there was little increase in spot markets.

Institutional flows are negative again. The basket of DAT Netflow is showing outflows, and demand for spot ETFs has fallen considerably.

Source: Glassnode

Demand from the corporate and public sectors has also slowed down, thus removing an important source of support that had been present in earlier periods of growth. The derivatives markets have added more pressure. Liquidations of longs have risen to the highest level of this period of decline.

Also Read: Binance Expands SAFU Fund With 1,315 BTC While Bitcoin Targets $84K