GEMINI

More than $5.3 billion in #Bitcoin shorts are at risk if BTC climbs toward $80,000 ❗️

The current #Bitcoin cycle is shaping up to be one of the tougher bear market phases on record, with prices down roughly 30% when compared to similar historical periods. A bear market here is defined as any period where Bitcoin trades below its 365 day simple moving average.

In previous cycles, price action below this level has often coincided with prolonged weakness, elevated uncertainty, and extended consolidation phases before recovery. So far, this decline places the ongoing phase among the weaker bear market performances in Bitcoin’s history.

Still Extreme Fear 👀

Trading near $60,000, price sits roughly 37% below the top 20% cost basis around $95,000, highlighting significant unrealized losses and psychological pressure on large holders. Since the October all time high, the market has repeatedly failed to hold above the cost basis of the top 1%, 5%, 10% and 20% of supply, the strongest buyers remain underwater and are likely to sell into rebounds rather than drive sustained upside. This setup closely resembles the May 2022 phase, where prolonged weakness below major cost basis levels kept sentiment fragile and upside attempts limited for an extended period.

The Realized Profit to Loss Ratio (90 day SMA) has been steadily declining since late July, despite the market reaching a second all time high in early October. Currently hovering around 1.45, the metric signals a meaningful drop in realized profitability.

While this points to increasing strain on market participants, the ratio remains above the sub 1 zone that has historically coincided with extreme capitulation, indicating that broader panic has not yet taken hold.

Implied volatility has risen faster than one week realized volatility, keeping the volatility risk premium positive. That dynamic continues to favor option carry. If realized volatility cools as recent price swings fade, short option positions should retain an advantage through expiry. The current backdrop still supports short term option strategies, assuming volatility stays contained in the near term.

Still Extreme Fear 👀

#Bitcoin’s primary valuation gauge has now slipped to an all time low, a market condition never seen before. Historically, extremes like this tend to surface near phases where downside risk weakens and longer term accumulation quietly begins. Although price action may remain unstable, these moments have often aligned with the early stages of broader market recovery.

The LTH cost basis heatmap reveals a clear accumulation zone in the low $60Ks, where long term holders have built significant positions. This level continues to act as a strong foundation for price, as coins held in this range are typically less reactive to short term volatility. Above current price, sell side pressure increases near the ~$80K area, marking a critical resistance band where supply is more concentrated.

This $60K-$80K range defines the active supply zone of the market. Holding above the lower boundary suggests underlying strength, while a decisive move through $80K would indicate that existing supply has been absorbed and demand is taking control.

During heightened #Bitcoin price volatility on February 5, wallets associated with World Liberty Finance, a project linked to Donald Trump, sold a substantial amount of Wrapped Bitcoin. On chain data shows that a total of 173 WBTC was converted into approximately $11.75 million in #USDC at an average price close to $67,000 per BTC. The sales were executed through several closely timed transactions, suggesting a calculated move rather than a single impulsive trade.

Such a shift into stablecoins during volatile market conditions often points to short term risk management or profit taking. While there is no official confirmation of a broader strategy change, transactions of this size tend to draw attention from traders, as they may indicate caution, liquidity preparation, or plans to re-enter the market at more favorable levels rather than a clear bearish outlook on Bitcoin.

#Bitcoin’s move from $72K down to $59K set off the biggest long liquidation event of the year. Many short term holders were caught off guard and began transferring coins to exchanges at a loss, reaching a new yearly high. This shows strong fear in the market, with recent entrants exiting quickly as selling pressure intensified.

More than 9.3 million #Bitcoins are currently underwater as price trades near $67.4K. This is the highest level recorded since January 2023, indicating that many investors are holding positions bought at higher prices. Periods like this often bring elevated volatility, as market participants reassess risk and short term direction.

Still Extreme Fear 👀

#Bitcoin’s spot price has dropped to $69.7K, placing it below most major on chain valuation models, such as the short term holder cost basis at $94.0K, the active investor average at $86.8K, and the true market mean near $80.1K.

While this reflects heavy near term selling pressure, the price is still trading above the realized price of $55.6K, which often marks a key long term equilibrium level and suggests the broader market structure has not fully broken down.

#Bitcoin experienced a major wave of loss taking on February 4, as the Entity Adjusted Realized Loss (7D SMA) surged to $889 million per day, the highest level since November 2022. This level of realized losses indicates that many market participants were forced to exit positions under pressure.

Historically, spikes of this scale have aligned with late stage sell offs, where emotional selling fades and stronger hands begin accumulating. Although short term uncertainty may persist, such data often reflects exhaustion in selling rather than fresh downside acceleration.

The Bull Score Index from CryptoQuant has fallen to zero, indicating extremely fragile market conditions. Bullish signals are virtually absent, a clear lack of buying strength and confidence.

Such levels are commonly seen during strong corrections or prolonged sideways phases. Although this does not confirm further downside on its own, it suggests the market is not ready for a sustained move upward yet. Risk management and disciplined trading remain essential in this environment.

#Ethereum’s on chain transfer volume has risen to 1.17 million based on the 14 day SMA, a zone that previously marked cycle highs in both 2018 and 2021, according to CryptoQuant. In earlier market cycles, similar surges in transfer activity reflected intense network usage near local tops, often followed by increased price swings and distribution from larger holders.

STH selling pressure keeps rising, with nearly 60,000 #BTC sent to exchanges in the last 24 hours. This is the highest inflow of the year and it is happening entirely at a loss, showing clear panic selling.

LTH are not moving any BTC in profit, which confirms this move is driven purely by short term capitulation. Volatility is likely to stay high until this selling pressure fades.

Still Extreme Fear 👀

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