The realized losses of Bitcoin (BTC) have surged to about $2.3 billion as of the 7th, marking the highest level since the collapse of Luna and UST in June 2022. However, this selling pressure is occurring around $67,000 rather than $19,000, indicating that it is more a signal of a cyclical liquidation of late buyers rather than a market system collapse.
What happened: Soaring realized losses
The 7-day moving average of Bitcoin's Net Realized Profit/Loss has recently fallen to about -$1.99 billion, according to recent on-chain analysis by Axel Adler. This indicator tracks the balance between realized gains and losses of coins that have moved on-chain, showing investor behavior in a softened form.
Subsequently, the figures slightly recovered to around -$1.73 billion, but it still signifies the second-deepest negative range in history. The net loss has remained below -$1 billion for several consecutive trading days, indicating ongoing selling pressure from investors who entered at high price levels and a capitulation phase.
Historically, when this indicator recovers to 0 and turns positive, the market tends to shift back to a profit-driven phase for a certain period.
Read more: XRP Drops 33% But Nine-Year Trendline Holds Strong
Why it matters: This time, the 'price context' is different.
On the surface, the figures appear threatening, but in a broader context, they tell a different story. In June 2022, a similar scale of realized losses occurred when Bitcoin was trading around $19,000, coinciding with a deterioration in network structure and a chain liquidation across the industry.
In contrast, this time Bitcoin has fallen below its key support level of $70,000, and similar realized losses are appearing around $67,000. According to Adler's data, this decline is more likely a process of unwinding buying pressure and leveraged positions entering the later stages of the cycle, rather than a systemic collapse like in 2022.
Currently, the range of $60,000 to $62,000 is emerging as the next key support area overlapping with the previous range. If this range is maintained, investor sentiment could stabilize; however, a downward breach could increase the likelihood of a deeper retracement.
Next read: Ethereum Loses $2,000 Level Amid Bearish Momentum
