Bitcoin [BTC] selling pressure increased as realized losses increased to a 3D SMA of –$317 million per day, reflecting the exit of distressed holders.
As liquidity decreased, the opportunities for profit-taking decreased, forcing new entrants to sell at losses, increasing net outflows.
Earlierthe metric consistently maintained positive results, reflecting continued profitability during the broader uptrend phase.
Sharp spikes interrupted these positive periods, pushing realized profits higher as investors sold into market euphoria and increased debt burdens.
Source: Glassnode/X
Such spikes often corresponded with local price tops as market participants aggressively locked in gains.
This transition now mirrors December 2022, when successive liquidations and credit stress pushed realized losses below $300 million per day.
At that point, forced selling dominated as weak hands exited under tight liquidity conditions. Then the price gradually stabilized, supported by patient accumulation and balance sheet recovery.
The momentum loss now appears to be stabilizing as the recent downside spikes become smaller and less frequent.
However, persistent numbers below zero still indicate continued capitulation, with supply continuing to shift to stronger, conviction-driven holders.
This is why the capitulation is deepening
Profitability continues to reset as realized losses expand across distribution phases, amplifying ongoing sell-side pressure.
Realized peak losses are now approaching the extremes of previous cycles, with single-day imprints exceed $5 billion, similar to late 2022 capitulation levels.
Source: Glassnode/X
As these spikes occur, the market structure weakens, while confidence and spot demand deteriorate at the same time. Losses as a percentage of market cap are also increasing, suggesting broader value destruction rather than isolated problems for holders.
This is important because higher proportional losses amplify balance sheet stress in all cohorts.
Source: Glassnode/X
The loss per coin moved increases, indicating that coins are being transferred at greater discounts relative to their cost base.
As this trend deepens, debt burdens continue to decline while options markets maintain high pricing for short-term downside risk.
Take advantage of the growing buzz as Bitcoin’s long bias increases
Long positioning increases across the market as the overall Long/Short ratio increases, reflecting increasing directional exposure.
However, the increase was not gradual; instead, it formed through sharp, inconsistent spikes, indicating a reactive rather than stable belief.
Long demand for Bitcoin remains dominant, with ratios often exceeding 2.5-3.0, while averages for altcoins remain closer to 1.5-2.0.
This divergence persists despite Bitcoin’s recent price weakness, highlighting that traders remain overweight BTC due to its perceived structural safety.
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At the same time, the concentration of leverage increases rather than disperses, increasing systemic liquidation sensitivity. As traders add longs to a weakening price structure, the positioning reflects a denial of broader downside risk.
Liquidation margins are now tightly below recent ranges, meaning modest credit declines could lead to successive long price increases. The trends in financing and open interest further indicate a renewed debt burden, and not a healthy deleveraging, within an active downward trend.
In summary, traders are facing increasing pressure to sell as they are heavily invested and at risk of losing more money.
Final thoughts
- Capitulation pressure is increasing because the losses traders are experiencing are similar to those during previous recessions.
- Despite the deteriorating structure, Bitcoin heavy long crowding persists, increasing systemic liquidation risk as leverage rebuilds in an active downtrend.