Analysts at CryptoQuant state that despite large realized losses, on-chain metrics do not yet confirm a cyclical bottom in Bitcoin.

On February 5, Bitcoin holders realized $5.4 billion in losses, the largest figure since March 2023.

However, in BTC terms, the loss volume was only 0.3 million BTC.

For comparison:

• During the late-2022 capitulation, realized losses reached 1.1 million BTC.

This suggests that while dollar losses look dramatic, the scale of actual coin distribution is still significantly smaller than during prior cycle bottoms.

Historically, cycle lows formed when this metric dropped to 45–50%. At 55%, the market may not yet be in deep capitulation territory.

Currently, long-term holders are selling roughly at break-even.

Historically, true bottoms tend to occur when long-term holders realize 30–40% losses, signaling deep surrender rather than neutral exits.

The Bull-Bear Market Cycle metric is already in the bearish zone, but has not yet entered the “extreme bearish” zone, which historically aligns with early reversal phases.

Despite:

• elevated fear
• rising shorts
• significant realized losses

…the structural on-chain picture suggests that full-scale capitulation may not have occurred yet.

This leaves open two scenarios:

📉 Continued downside to force deeper long-term holder capitulation 📊 Extended consolidation before a structural base forms

For now, CryptoQuant’s assessment implies that the market has entered stress territory — but not necessarily the final washout phase.