Bitcoin’s price action over the past two weeks has opened a new phase stress among traders, with on-chain data showing realized losses rising to heights last seen in 2022.
Glassnode’s latest Week-On-Chain report shows that Bitcoin is trading above a key cost basis level, but is also visibly under pressure due to increased loss realization, declining demand and weakening liquidity, which has left short-term investors in a difficult position.
Realized losses return to deep territory
According to Glassnode, realized losses under Bitcoin entities have increased massive, and is now almost at the same magnitude as during the deep retracements of the 2022 bear market. Notably, the relative unrealized loss (30D-SMA) has risen to 4.4% after almost two years below 2%.
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The escalation in realizing losses reflects how the recent drop below $90,000 has forced many market participants to offload coins at prices below their purchase costs. This in turn has disrupted the gradual improvement in profitability seen earlier this year.
Bitcoin’s recent recovery from the November 22 low above $92,000 has not eased the pressure on holders. Glassnode noted that entities are still recording losses at an increasingly rapid pace, with the 30-day average of realized losses now around $555 million per day.
These conditions mean that investors are losing confidence in the near-term upside prospects for Bitcoin and are choosing to reduce their exposure, even at unfavorable prices. Therefore, the report noted that solving it will require a renewed surge of liquidity and demand to restore confidence.
Glassnode also points to a sharp increase in profit-taking among long-term holders, whose realized profits have risen to roughly $1 billion per day and briefly set a new record above $1.3 billion.
Even with this increased level of distribution, Bitcoin is currently just above the True Market Mean, a long-standing cost-based benchmark that serves as a point of structural support. The recent price drop below $90,000 has pushed this zone close to its limits, but the glimpse of demand reflected around it suggests that the price could move back towards the 0.75 quantile near $95,000 and possibly also close to the short-term cost basis for the holder.
Spot ETF, futures and options markets indicate weakness
Glassnode’s report points to continued weakness among ETF flows, which have cooled significantly after a period of strong inflows earlier this year. This slowdown represents a reduction in one of the largest and most immediate sources of liquidity on the buy side of Bitcoin.
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Liquidity in the spot market has also faded, with order books on the major exchanges nearing the lower end of their 30-day range. This has created an environment in which Trading activity has weakened from November through December, and there are fewer liquidity flows available to absorb volatility or support directional moves.
The positioning of derivatives reflects a similar caution, with funding rates remaining close to neutral. Futures open interest has also been subdued and has failed to meaningfully rebuild since the collapse below $90,000.
Across major stock markets, the tone is the same: liquidity is lighter, sentiment is softening and participants are leaning toward defensiveness rather than chasing short-term rallies. Attention now turns to how Bitcoin will respond in the aftermath of the recent interest rate cut by the Federal Reserve.
Featured image from Pixabay, chart from Tradingview.com