Lede
Bitcoin has recently fallen below the $90,000 threshold, a psychological and technical level that has historically served as a benchmark for market sentiment. This price action has effectively pushed onchain profitability metrics into negative territory, indicating a fundamental shift in the health of the network’s financial state. For the first time in more than two years, Bitcoin holders are transitioning from a period of booking profits to realizing aggregate losses. This change in behavior is captured by the net realized profit and loss metric, which measures the collective gains or losses of coins moved onchain.
Data indicates that this metric has dropped to 69,000 BTC over the last 30 days, reflecting a sharp decline in market strength. Such a transition suggests that the market could be entering a macro downtrend, as the previous momentum that characterized the bull cycle begins to dissipate. The shift to realizing losses marks a significant departure from previous trends, signaling that investors who acquired assets at higher valuations are now realizing losses in response to the downward price pressure. This environment is often associated with the early stages of a bear market, as the aggregate profitability that fuels further investment dries up and is replaced by distribution pressure.
Context
The current profitability landscape for Bitcoin bears a striking resemblance to previous market cycles, particularly the transition observed during the bull-to-bear shifts of the past. Annual net realized profits have undergone a severe contraction, falling to 2.5 million BTC. This is a dramatic decrease from the 4.4 million BTC recorded as recently as October. The current levels of realized profit have not been seen since March 2022, which was a pivotal moment in the previous market cycle’s descent into a bear phase.
Adding to the complexity of the current market structure is the fact that Bitcoin is now trading below the cost basis of 75% of its circulating supply. This suggests that a vast majority of holders are currently in a position where the market price is lower than their acquisition price. Specifically, the asset has lost its 75th percentile cost basis support, which is currently calculated at approximately $92,940. When an asset trades below these major cost basis percentiles, it often triggers increased distribution as holders seek to mitigate further risk. This dynamic reinforces the theory that onchain profit dynamics have moved toward conditions consistent with a macro downtrend. The inability to maintain these high-level cost basis supports indicates that the demand which sustained the previous rally is currently insufficient to absorb the volume of coins being moved at these valuations.
Impact
The impact of recent price movements has been felt across both technical and onchain indicators. The BTC/USD pair has recorded a 9% drawdown from its 2026 high of $97,930, illustrating the speed of the recent correction. Analysts, including Titan of Crypto, have highlighted that the asset has flashed a specific bear market signal on the two-month time frame. Historical analysis of similar technical setups reveals that such signals have often been followed by significant market drawdowns, ranging between 50% and 64%.
Currently, the market is testing immediate support levels to determine the extent of the current decline. Trader Merlijn The Trader has identified a rising trendline support situated between $89,000 and $90,000. This area is critically important because it represents a high-density accumulation zone where investors acquired approximately 941,651 BTC over the last six months. If this level fails to act as a floor, it is likely that the asset will revisit lower price ranges. The high volume of Bitcoin acquired at these levels suggests that a break below $89,000 could trigger a cascade of further loss realization, as nearly one million BTC would move into an unrealized loss position. This technical and onchain confluence creates a high-stakes environment for the current price range as the market searches for a sustainable bottom.
Outlook
As the market looks toward the remainder of the cycle, several analysts have expressed concerns regarding a prolonged period of bearish activity. There is a growing expectation that 2026 will be characterized as a bear market year, with various forecasts projecting that the Bitcoin price could return to levels as low as $58,000. These long-term outlooks are grounded in the observation of declining profit peaks and the transition of holder behavior from profit-taking to realizing net losses, a pattern that historically precedes extended downturns.
In the near term, the buyer congestion zone between $80,000 and $84,000 stands as the primary structural support for the BTC price. This range is expected to be a major battleground if the current trendline support fails. Market observers are also watching for signals of continued distribution pressure, such as increased transfers of BTC to exchanges and selling by long-term holders. The loss of key support levels like the $92,940 cost basis has shifted the dominance of risk to the downside. Unless Bitcoin can recover these critical levels and reverse the negative trend in onchain profitability, the market appears positioned for an extended downtrend. The combination of historical profit patterns mirroring the 2022 bear market and the current lack of momentum suggests that the path to recovery may require significant consolidation.
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