Usman Salis
Bitcoin's pulling back, but the real capitulation hasn't hit. Current realized losses sit at just -3.5%, nowhere near the -12% extremes that marked actual cycle bottoms over the past two years. With BTC at $111,875 and trading under its realized price of $115,624, the on-chain signals are clear: this correction probably isn't done.
What the Data Shows
Analyst Ali recently pointed out that Bitcoin corrections have only reversed after realized trader losses hit around -12%. We're not even close to that. The CryptoQuant chart tells the story - previous bottoms in late 2022, mid-2023, and early 2025 all lined up with those deep -12% dips in the profit/loss margin. Right now we're at -3.5%, which historically means there's more room to fall. The realized price - basically the average cost basis for coins that recently moved - sits at $115,624 while spot price is below $111,875. When BTC trades under realized price, it means short-term holders are underwater, and past cycles show that extended periods below this level usually come before full capitulation.
Why This Time Feels Different
A few things are keeping the floor from completely dropping out. Spot Bitcoin ETFs and institutional products are soaking up selling pressure that would've crashed the market in previous cycles. Long-term holders are stubbornly holding on, keeping supply locked up. And despite high interest rates causing volatility, macro conditions are actually pushing some capital into BTC as a hedge. But here's the thing - without that sharp washout, it's tough to say we've seen the real bottom.
The $110K psychological level is immediate support, but the real test comes if we push toward -10% to -12% in realized losses - that's where historical cycle bottoms live. On the upside, $115K (realized price) and $120K are the resistance zones where BTC needs to reclaim and hold to signal the correction is actually over.
By historical standards, this correction is still shallow. Unless Bitcoin quickly breaks back above $115K-$120K and holds it, the on-chain data is screaming that we're not done yet. That -12% capitulation level could be the actual signal long-term players are waiting for before the next real leg up begins.
Usman Salis
