Bitcoin just printed one of the most brutal on-chain signals ever recorded. According to data from Glassnode, the February 5 crash from $70,000 to $60,000 resulted in a staggering $3.2 billion in realized losses - the biggest single-day realized loss event in Bitcoin’s history.
The metric used, Entity-Adjusted Realized Loss, tracks the USD value of coins sold below their acquisition price. This time, the damage surpassed even the infamous 2022 LUNA collapse, which saw $2.7 billion in realized losses.
Liquidations Fuel the Capitulation
The drop wasn’t gradual - it was violent. On-chain data shows that over $1 billion in BTC positions were liquidated in a single day, forcing traders to close leveraged positions at heavy losses.
Some analysts believe this could mark a capitulation bottom. Tony Sycamore, analyst at IG Australia, described the move as a “capitulation-type low,” suggesting it could act as a catalyst for a sustained rebound.
Bitcoin has since bounced modestly, trading around $67,543 at the time of reporting. While BTC is up roughly 1.7% in the last 24 hours, it remains down nearly 29% over the past 30 days and more than 50% below its October all-time high above $126,000.
Is This the Bottom or Just the Beginning?
Market veterans are split. Steven McClurg, CEO of Canary Capital, believes more pain could be ahead.
He predicts Bitcoin could drop toward $50,000 in the summer before rebounding later in the year. Meanwhile, Nick Puckrin, co-founder of Coin Bureau, described the broader crypto environment as being in “full capitulation mode” warning that this may not be a short-term correction but a drawn-out reset lasting months.
ETF Outflows Add Pressure
Institutional demand has also weakened significantly. Analysts at Deutsche Bank noted that massive withdrawals from crypto ETFs have amplified downside pressure. On-chain data shows:
- $7 billion in ETF outflows in November
- $2 billion in December
- Over $3 billion in January
The drying up of ETF inflows removed a critical demand engine that previously supported price strength.
Standard Chartered Cuts 2026 Target
Adding to the cautious outlook, Standard Chartered slashed its 2026 Bitcoin forecast from $150,000 to $100,000.
Geoff Kendrick, the bank’s Head of Digital Asset Research, argued that weaker U.S. economic momentum and lower expectations for Federal Reserve rate cuts are weighing heavily on risk assets.
The broader macro backdrop hasn’t helped either. After a strong U.S. jobs report, hopes for aggressive rate cuts faded. According to the CME FedWatch Tool, there’s still a high probability of a modest cut at the March 18 meeting, but uncertainty remains.
Complicating matters further, President Donald Trump nominated Kevin Warsh - widely viewed as hawkish - to lead the Federal Reserve, raising concerns that tighter monetary policy could persist.
A Historic Capitulation Moment
Historically, Bitcoin has rallied to new highs following major capitulation events and its four-year halving cycles. But timing remains the big question.
The $3.2 billion realized loss milestone signals extreme stress across the network - a moment when long-term holders and leveraged traders alike were forced to exit.
Whether this marks a generational bottom or just another stop on the way down remains uncertain.
