BTC Falls Back to Pre-FTX Era Lows — A Warning for Bulls

Bitcoin is showing one of the sharpest momentum breakdowns of the current cycle, with on-chain indicators signaling stress levels last seen during the market’s most severe sell-offs.

Glassnode data reveals realized losses have surged to levels reminiscent of the November 2022 capitulation around the FTX collapse. This surge is being driven almost entirely by short-term holders—wallets that bought BTC within the past 90 days—unwinding as Bitcoin trades below its 200-day moving average.

Although short-term realized-loss dominance is typical during periods of market stress, this week’s activity stands out. It is the largest such cluster since early 2023 and one of only a few occasions in the past five years where daily realized losses have reached $600 million to $1 billion.

Market structure indicators underscore the extreme. Analyst MEKhoko notes that BTC is now trading more than 3.5 standard deviations below its 200-day moving average, a level seen only three times in the past decade: November 2018, the March 2020 pandemic crash, and June 2022 during the Three Arrows Capital/Luna crisis.

The current drawdown follows the same behavioral pattern: a spike in spot selling, collapsing funding rates, and the retreat of marginal buyers who previously relied on momentum.

With BTC deeply stretched below trend, short-term holders largely washed out, and sentiment anchored in extreme fear, market positioning is approaching levels historically linked to short-term bottoms.

However, without a clear macro catalyst, analysts caution that volatility is likely to remain elevated around these levels.

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