GEMINI

Market conditions around the $70k zone show unrealized losses reaching nearly 16 percent of total market capitalization, signaling elevated stress across participants. The overall structure closely mirrors what played out in early May 2022, when price action weakened under selling pressure without triggering a broader macro breakdown.

Despite continued price pressure, outflows from digital asset investment products slowed to $187 million. Historically, when capital outflows begin to ease during market weakness, it has often marked a potential inflection zone, where selling pressure cools and sentiment starts to level out ahead of a possible shift in trend.

Market data is showing a clear shift in behavior from large #Bitcoin holders during the recent price decline. On February 6, accumulator addresses absorbed roughly 66.94k BTC, the highest daily inflow recorded in this cycle. Instead of reacting with panic selling, these wallets appear to be using the dip as an opportunity to accumulate. Such patterns usually point to long term confidence and often emerge when prices are undervalued and sentiment is weak.

Still Extreme Fear 👀

Over the last 24 hours, the crypto market saw heavy liquidations, with 88,396 traders forced out of their positions. Total liquidations reached $336.27 million. The biggest hit came from a single #BTCUSD position on Hyperliquid, where a $18.85 million order was liquidated ❗️

Since the correction began, pressure has moved from short term holders to long term holders, with the 6-12 month and 12-18 month cohorts already under water at cost bases around $103,188 and $85,849, showing that the drawdown is reaching deeper into the holder base. Price reacted near the realized price of the 18 month-2 year cohort at $63,654, a level that likely matters to higher conviction holders, but the rising cost basis of this group indicates that higher priced coins are continuing to age into long term holdings.

Rather than drifting without a reference point, #Bitcoin’s price tends to move toward the average cost paid by its holders, known as the realized price. This level reflects the collective commitment of those who hold Bitcoin balances and are willing to keep them at those prices.

When the market trades below this average, selling pressure weakens because most holders are at a loss. When it trades well above it, profit taking increases. In this way, holders themselves provide Bitcoin with value through their behavior and cost basis.

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 👀