Bitcoin investors are finally selling at an annual net loss, but the pain remains below the levels seen during previous capitulation events.
Bitcoin holders have only just begun realizing net losses on a yearly basis, suggesting the market has either avoided the worst of a typical downturn or has much further to fall.
Julio Moreno, head of research at CryptoQuant, an on-chain analytics platform, said in an X post that the rolling one-year total had fallen to a net realized loss of 136,000 BTC▼$76,940.00.
But that is still far below previous cycle lows. According to Moreno, annual realized losses reached 1.3 million BTC during one previous downturn and 3.7 million BTC during another.
The current figure is equal to roughly 10% and 4% of those losses, respectively. As Moreno argued, capitulation “is nowhere to be seen,” adding that “either this is the most benign cycle in terms of realized losses or there’s still a lot of room to go.”
Realized losses are recorded when Bitcoin moves at a lower price than when it previously changed hands. So the metric tracks losses that holders have actually locked in.
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Falling Realized Capitalization
Moreno also cautioned against treating a decline in Bitcoin’s realized capitalization as direct evidence that investors are selling at a loss.
Realized capitalization values each BTC at the price at which it last moved, he said, adding that it can decline when short-term holders transfer BTC at lower prices, even if those particular sellers still made a profit.
Some have suggested that institutional investment in Bitcoin ETFs may mitigate this problem. Moreno rejected that idea, though, pointing out that “ETFs have been net sellers this bear market.”
Earlier this week, analysts at K33 Research, a crypto research firm, warned that July’s unusually weak Bitcoin trading activity was squeezing exchange revenue and making it harder for some platforms to stay afloat. Vetle Lunde, the firm’s head of research, said Bitcoin was on track for its quietest month since November 2023 as its price remained stuck in a narrow range.
Read more: Bitcoin Treasury Hyperscale Sells 9% of Its BTC Despite Indefinite Hold Pledge
