Losses on Bitcoin in 24 hours are close to $900 million!

In the space of 24 hours, bitcoin recorded nearly $900 million in realized losses, a level not seen since the collapse of FTX in 2022. This chilling figure, taken from on-chain data, illustrates much more than just a drop, but it marks a sharp turning point in investor sentiment. Such a massive and sudden wave of sales at a loss signals a new phase of capitulation, revealing the persistent fragility of a market still far from having regained its balance.

A massive capitulation

While the flagship crypto has risen above $70,000, the latest data shared by Glassnode shows a level of losses made on the Bitcoin network that had not been reached since the FTX debacle.

On February 6, investors recorded a total daily loss of nearly $889 million, a figure adjusted to exclude internal portfolio transfers and only retain actual losses between separate entities.

These figures reflect a massive capitulation on the part of many investors, particularly those who had accumulated bitcoin at higher price levels and preferred to liquidate their positions in panic. To better understand the extent of this correction, here is the main points revealed by the available data:

• The total amount of realized losses: approximately $889 million in 24 hours, based on the 7-day moving average;

• The highest level recorded since November 2022, during the collapse of FTX;

• Data source: Glassnode's Entity-Adjusted Realized Loss indicator excludes intra-portfolio movements;

• The nature of the losses: loss-making sales of BTC by investors giving in under market pressure;

• The direct consequence: the strengthening of the downward spiral, aggravated by a drop in the price of BTC on the spot market.

This dynamic suggests a return of panic in the crypto market, triggered not by an external event, but by a structural fatigue of investors in the face of a market recovery which is slow to materialize.

Extreme fear fuels market instability

Beyond the losses made, data from the Bitcoin Fear & Greed Index confirm the state of extreme tension on the market. The index, which usually fluctuates between 0 (extreme fear) and 100 (extreme greed), has fallen to levels close to 9 according to several analysts.

This threshold reflects a shift towards a phase of massive disengagement, often triggered by a loss of bearings in the face of price volatility. Thus, when the index reaches such levels, it reflects an irrational fear pushing investors to part with their assets under unfavorable conditions.

Such a climate of distrust is not new, but its current intensity echoes the darkest periods of the 2022 bear market. Unlike a fall caused by a brutal external event, such as the FTX affair or the bankruptcy of Terra Luna, this wave of sales this time seems fueled by a misalignment between bullish expectations and contradictory technical signals, creating persistent instability. Volatility is intensifying in a context where hopes of a rapid recovery seem increasingly distant.