Bitcoin dips gradually; buying more means losing more, discouraging buyers from entering the market

Recent Bitcoin market has experienced a sustained decline since October last year, with prices dropping from a historical high of $126,000 to around $62,800, a nearly 50% decrease. According to the latest market data, up to 45% of circulating Bitcoin supply is in unrealized loss, objectively reflecting the asset devaluation pressure faced by most investors. Unlike the panic selling commonly seen in past markets, this decline has been gradual, with prices drifting downward. Investors buying at this stage are effectively losing, which has caused a structural impact on their pricing psychology.

Buying at a loss: Bitcoin’s slow decline severely impacts investor confidence

Market data shows that nearly nine million Bitcoins (about 45% of total supply) are held at a cost higher than the current price, with this figure approaching half of the supply during recent lows. In the first 22 trading days of February, 19 days showed “Net Realized Losses.” This phenomenon indicates that the market has not experienced a quick flush-out of excess supply through capitulation, but instead is caught in a cycle of slow decline. This has led to more conservative investor psychology, with each short-term rebound seen by some holders as a “liquidity event” for exit, further suppressing overall market recovery momentum and upward price potential.

Spot ETF capital momentum and cost pressures

Since the beginning of this year, U.S. Bitcoin spot ETFs have experienced nearly $3 billion in net outflows. Data shows that the average purchase cost for ETF investors is around $83,956, meaning this group is currently facing an average unrealized loss of about 23%. The previous inflow-driven price support from ETF capital is now reversing, reflecting that traditional financial investors are adopting more defensive asset allocations amid this correction. Although total ETF holdings have only modestly declined by 6% from their peak, the potential regulatory pressure remains a variable that the market must continuously assess amid overall economic uncertainty.

(13F institutions sell over 25,000 BTC in Q4 Bitcoin ETF sell-off)

Major Holders’ Movements and Distribution Pressure

In addition to retail and institutional funds, large Bitcoin holders known as “Whales” have also recently shown net selling activity. According to Glassnode, these large entities have released over 43,000 BTC in the past week. Analysts point out that this rebound accompanied by selling pressure indicates the market is in a “Distribution Pressure” phase. Early low-cost accumulators or high-position investors are taking advantage of price rebounds to adjust their holdings. This further shifts the market’s buying foundation, turning potential buyers who once believed they could drive the rally into risk management strategies in the short term.

Bitcoin price may find support at $54,900

According to Glassnode data, after Bitcoin broke below the true market mean of approximately $79,000 (green line in the chart), the overall structure shifted to a defensive stance. However, prices found support in the demand zone between $60,000 and $69,000, effectively absorbing recent selling pressure.

In the absence of unexpected macro catalysts, the true market mean of $79,000 and the realized price of $54,900 (blue line in the chart) form the main resistance and support levels for the medium-term market structure.

This article, “Bitcoin’s slow decline, buying at a loss, discourages buyers,” was first published by Chain News ABMedia.