Bitcoin’s recent drop toward $80,000 has driven most active capital in the asset into losses, signaling a shift in market conditions for the world’s largest cryptocurrency.
Bitcoin has erased nearly 35% from its October peak of about $126,000 after sinking to a seven-month low. As a result, it is now generating one of the largest waves of unrealized losses this cycle.
SponsoredOver 70% of US Dollars Invested in Bitcoin is in Loss
According to data from on-chain analytics firm Checkonchain, the price rout has forced more than 70% of the capital allocated to Bitcoin underwater.
Bitcoin analyst James Check explains that 71.2% of the network’s realized capitalization carries a cost basis of at least $86,500. This metric prices each coin in the circulating supply at the value it last moved on-chain.
Thus, it effectively represents the aggregate entry price for the market’s active investors.
So, with Bitcoin recently tumbling below that critical waterline, a flood of buyers who entered during the late-2024 and early-2025 rallies now face mounting losses. Many of these investors are effectively trapped in positions that no longer break even.
This heavy concentration of volume near the highs indicates that short-term holders are experiencing acute stress. It is forcing their Net Unrealized Profit and Loss metrics to collapse to cycle lows.
SponsoredBitcoin Market Sentiment Reaches 2-Year Low
Meanwhile, this fracture in the broader market structure is further corroborated by Glassnode data.
The firm’s Relative Unrealized Loss indicator, which tracks the dollar value of coins held below their acquisition price relative to total market capitalization, has spiked to 8.5%. In a typical, healthy bull market, this metric generally remains below 5%.
So, the current breach suggests that the drawdown represents a significant “market reset” of the asset’s ownership base rather than a standard volatility correction.
While prices have staged a modest recovery to the $84,543 level at press time, the psychological damage to the retail sector appears severe.
Social media sentiment has cratered to its lowest point since December 2023, according to blockchain analytics platform Santiment.
The firm said its analysis of social media commentary across X, Reddit, and Telegram shows that retail traders are capitulating and panic-selling at levels unseen in two years.
Historically, such extreme levels of bearishness often act as a contrarian signal, suggesting that the market may be clearing out weak hands in preparation for a local bottom.
