The group of Bitcoin long-term (LTH) holders are now sitting on the deepest underwater pile of coins since the March 2020 panic, a sign that the market clean-up phase is still ongoing. according to Update on the series From Glassnode, LTH entities currently hold 5.3 million BTC with an unrealized loss. This reading beats the tally of post-FTX collapses and now rivals only the extreme pressure seen when the pandemic first devastated global markets.
The magnitude of stress is magnified by who endures the pain. Long term holders are the group least vulnerable to panic, typically accumulating during bear phases and spreading into strength. When this combination starts bleeding into paper at historic levels, it means the price has gone deep enough to hurt even the most committed hands. The composition of this underwater supply is also important – many of these coins have been accumulated by large buyers who held them during the drawdown period but are now choosing to exit. Their sales are captured in realized loss data, which reached $1.3 billion per day as Bitcoin fell back toward $62,000. LTHs accounted for $770 million of this amount, approximately 59% of the total realized losses.
Underwater display exceeds post-FTX shock
To find a worse reading, you have to go back to the Covid crash, when Bitcoin’s price collapsed from $8,000 to $3,800 in a matter of days. The fact that we are now back to those depths – for a price about 16 times higher – reveals how strongly the market punishes late-cycle entrants. The post-FTX episode, which saw a spike in LTH supply loss around the stock market crash, was already considered an anomaly. This level has now been breached, indicating that the resolution process is not just a passing change, but an extended recalibration of cost rules.
The sheer volume of 5.3 million Bitcoins stuck underwater also raises questions about the extent to which this cleanup process is needed. In previous sessions, the loss width in LTH began to decline only after the price found a solid floor and a new accumulation. Currently, the data points in the other direction. The market has yet to see a convincing reduction in LTH pain; Instead, it beats higher. This does not guarantee another step down, but it does make the recovery path look longer and more fragile. Any macro or regulatory shock – such as the political heat surrounding the cryptocurrency bill Banks tries to kill a few days before the Senate vote– It can turn a hesitant sale into a complete surrender.
$1.3 billion in daily realized losses changes the risk equation
The spike in realized losses is not just a large number; It is a structural shift. When daily total losses reach $1.3 billion, the market is no longer in a smooth decline. It’s a real-time repricing risk, and LTHs are driving the shipment out. The fact that 59% of this volume came from long-term portfolios suggests that the mindset of holding money is cracking. Some of these entities held out through the post-FTX decline and the volatile months that followed, only to finally capitulate at levels they would have likely considered safe a year ago.
It is this mismatch – between where coins are collected and where they are abandoned – that makes the current situation so unusually heavy. Bitcoin price is not at historic lows, but the concentration of LTH supply is underwater. Traders monitoring on-chain data will monitor whether the realized loss rate begins to decline or accelerates further. The slowdown may indicate that forced selling is running out, which could pave the way for supply-side stabilization. On the other hand, acceleration would confirm that the resolution process still has room to move forward. While the on-chain picture has been undeniably confirmed, activity in the broader ecosystem continues to rise, with developer attraction across major chains holding steady as shown in our latest report Top 10 Blockchains by Developer Activity Report. This contradiction between on-chain currency pressure and ongoing construction activity is one of the defining tensions of this cycle.
