Bitcoin’s Unrealized Losses Hit 22% – No Signs of Capitulation Yet

Bitcoin’s Unrealized Losses Hit 22% – No Signs of Capitulation Yet

Bitcoin is finding it challenging to regain the $80,000 mark after facing several days of continuous selling pressure and increasing market uncertainty. The price dynamics are still delicate, with each attempt to rebound failing to gather significant momentum, raising concerns that the market is currently undergoing a more profound structural shift rather than just a temporary correction. According to prominent analyst Axel Adler, Bitcoin entered a bear cycle in October 2025 and is now navigating a corrective phase following its recent peak close to $125,000.

Data from on-chain analytics supports this view. Two significant indicators — Percent Unrealized Loss and the LTH/STH SOPR Ratio — show increasing stress among holders, yet they do not suggest a complete capitulation. Unrealized losses have surged sharply, tripling since January from about 7% to around 22% as prices decreased from $95,000 to approximately $78,000.

However, this uptick in losses is still well below the historical thresholds of 40–60% typically associated with severe bear-market capitulation experienced in 2019 and 2023.

Bitcoin Percent Unrealized Profit and Loss | Source: Axel Adler

At the same time, the LTH/STH SOPR Ratio has declined by about 40% from its highs, indicating reduced profitability and a lesser willingness to sell at a loss, particularly among long-term holders. Collectively, these indicators suggest that Bitcoin is in a mid-cycle stress phase: pressure is mounting, confidence is wavering, but blatant forced selling has yet to materialize.

Understanding Profit Compression Amidst Market Uncertainty

Adler emphasizes the LTH/STH SOPR Ratio as a critical indicator for analyzing the current market situation. This metric compares the profitability of coins spent by long-term holders (LTH) versus those by short-term holders (STH), shedding light on who is incurring losses and who is still selling at a profit. High readings suggest that long-term holders are realizing profits more effectively than short-term participants, while decreasing values indicate growing loss realizations among newer investors.

Bitcoin LTH/STH SOPR Ratio | Source: CryptoQuant

Since reaching a peak of about 1.85 in October, the LTH/STH SOPR Ratio has fallen to around 1.13, marking a roughly 40% decline. This significant compression highlights a noticeable drop in profitability across the market. Even so, the metric remains above the crucial 1.0 level. Historically, prolonged periods below 1.0 indicate times when short-term holders capitulate en masse, often resulting in considerable losses. Dips into the 0.6–0.8 region have coincided with complete capitulation and cycle lows in 2015, 2019, and 2023.

Currently, profit margins are tightening for both groups, but long-term holders continue to exit their positions, on average, above their original investment. Adler warns that if the ratio drops decisively below 1.0, it could signal a shift toward true capitulation, while a recovery towards 1.3–1.4 would indicate a resurgence of market confidence. Together with the rising unrealized losses, the data suggests that we are in a mid-cycle stress phase instead of reaching a bottom for this bear market.

Bitcoin Attempts to Stabilize After Significant Sell-Off

The price trend of Bitcoin on the 12-hour chart shows a market still under structural pressure. Despite a brief attempt to stabilize around the $78,000 level, the aggressive sell-off from the mid-$90,000s saw Bitcoin break significantly below several important moving averages. This confirms a broader bearish trend rather than a mere correction. The steep downside movement was accompanied by a noteworthy surge in trading volume, suggesting forced selling and liquidation flows rather than an orderly profit-taking approach.

BTC testing $78K demand | Source: BTCUSDT chart on TradingView

Since hitting the local low of around $78,000, Bitcoin has made some attempts to rebound; yet, this bounce lacks strength. The cryptocurrency is still trading below both the short-term and medium-term moving averages, which are now trending downward and acting as a dynamic resistance. Previous support in the $88,000–$90,000 range has turned into a supply zone, limiting upward movement and solidifying the sense of a range developing beneath a fractured structure.

The present consolidation pattern seems indicative of a temporary relief phase rather than a complete trend reversal. Although momentum has slowed, there is still no evidence of a sustained demand absorption or strong buyer interest stepping in.

As long as Bitcoin remains beneath the descending moving averages, the risk of further declines persists. The price remains vulnerable to testing recent lows again. To signal a meaningful shift in this short-term structure, Bitcoin would need to reclaim and hold above the $82,000–$85,000 region.

Key Takeaways:

Bitcoin is currently experiencing a bear market, with unrealized losses reaching 22%.
Key indicators suggest mid-cycle stress but no capitulation yet.
The LTH/STH SOPR Ratio is critical for analyzing market holder behavior.
Bitcoin's price is attempting to stabilize after a significant sell-off, still facing downward pressure.