Unrealized Bitcoin Losses Hit All-Time High, Glassnode Says: Bear Market Signs?

Bitcoin BTC/USD investors are facing unprecedented pressure as Glassnode data shows the largest unrealized losses on record, concentrated among new market participants.

Despite Bitcoin's relative price resilience, capital inflows have slowed, and liquidity continues to tighten across the digital asset landscape.

What Happened: The analysis attributes this strain to the convergence of global macroeconomic volatility, liquidity contraction and subdued capital inflows, all of which have intensified stress across the crypto market.

While veteran holders, or “long-term holders,” remain broadly in profit, the bulk of current unrealized losses is concentrated among newer participants who bought during recent highs.

The macroeconomic backdrop is compounding investor strain.

Heightened geopolitical uncertainty and tariff-driven trade realignment under the Trump administration have pushed U.S. Treasury yields higher again, with the 10-year yield surging back to 4.5% after a brief dip earlier this year.

Glassnode notes this is creating extreme bond market volatility, as reflected in the elevated MOVE Index, a key gauge of Treasury market stress.

This instability has trickled into digital assets.

Bitcoin fell as low as $75,000 during the recent market shock before rebounding to around $85,000.

Still, the drawdown marks Bitcoin's largest correction in the 2023–25 cycle, pulling back 33% from its all-time high.

Yet, that drop remains relatively moderate compared to past cycles, where similar conditions triggered 50%+ declines.

"Drawdowns since 2023 have been shallower and more controlled," Glassnode reported.

This indicates growing investor maturity and resilience — particularly among long-term holders, who have largely remained unfazed.

Despite the psychological toll of losses, 75% of Bitcoin's circulating supply remains in profit.

However, the proportion of coins in loss, totaling $410 billion in realized cap terms, is the highest in history.

According to Glassnode, this figure exceeds the losses seen during the 2021 crash and the depths of the 2022 bear market.

As newer investors age into long-term holder status, the risk of structural drawdown intensifying grows.

Glassnode warns that if these positions remain underwater, historical patterns suggest the market could slide further toward a full-fledged bear regime.

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Why It Matters: Meanwhile, stablecoin growth has stalled, and capital inflows have dropped to just +0.9% monthly — further evidence of risk-off sentiment.

"Realized cap is at an ATH of $872 billion, but the pace of growth has slowed substantially," Glassnode notes, signaling market hesitation.

For now, the market sits at a pivotal juncture.

Metrics like Net Realized Profit/Loss have reset to long-term medians, often indicative of decision points between continued consolidation or a breakout trend.

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