Selling pressure among Bitcoin’s short-term holders reached extreme levels in early February, triggering a capitulation-like flush in BTC’s broader structure.
The entity-adjusted net realized gain/loss for the short-term holder fell sharply. Bitcoin’s 7D EMA posted a peak daily loss of nearly -$1.24 billion on February 6.
That low point coincided with a sharp negative peak, reflective rapid loss of crystallization in reactive Bitcoin participants rather than patient distribution.
From then on, flows began to stabilize as Bitcoin’s selling pressure gradually cooled. The loss bars became smaller session after session, which was a sign of moderate panic.
As the BTC market absorbed the distressed supply, the 7D EMA climbed steadily towards the zero line, reinforcing the diminishing urgency to liquidate Bitcoin at a loss as early stabilization dynamics began to form.
Source: Glassnode/X
On February 23, the 7D-EMA improved to -$0.48 billion, which represented a 61% reduction in 17-day loss intensity.
As realized losses narrow, downward pressure typically diminishes and price action often shifts from forced selling to stabilization.
Yet the entity-adjusted net realized gain/loss for the short-term holder remains negative.
This implies that the market is de-stressing and not yet moving into pure, profit-oriented reaccumulation.
Meanwhile, derivatives stress increased.
Financing rates fell to -0.038% and Liquidations increased by more than 450% to $473 million. Open interest fell to $96 billion, reinforcing the deleveraging effort.
This divergence suggests that seller depletion is gradually increasing, while historical parallels point to early base formation rather than confirmed macro capitulation.
BTC STH loss overhang persists despite realized stress cooling
Building on the earlier signs of stress moderation among short-term keepers, the pressure now appears to be concentrated among recently admitted whales.
While realized losses have declined, unrealized losses remain structurally heavy on the larger balance sheets.
During Bitcoin [BTC] These whales aggressively piled on and expanded their paper profits.
However, as the price momentum faded in the fourth quarter and reversed sharply those gains compressed and turned negative.
Source: Darkforst/X
The breakdown below $60,000 in early February marked the turning point.
On February 6, unrealized losses rose to approximately $32 billion, representing the most acute balance sheet stress of the year.
While the price has stabilized modestly since then, current unrealized losses still hover around $26 billion, indicating only partial relief.
This divergence is important.
The intensity of BTC’s realized loss is cooling, yet a significant unrealized deficit remains in the recent whale cohorts.
As long as these positions remain materially underwater, market stability depends on their willingness to absorb volatility rather than channel it into distribution.
Final summary
- Bitcoin [BTC] Capitulation has cooled sharply, but BTC’s structure remains vulnerable as derivative deleveraging and unrealized losses limit BTC’s recovery momentum.
- BTC whale cohorts remain underwater, making Bitcoin’s stabilization dependent on holder conviction amid volatility.