Bitcoin Loses $2.3B in Biggest Crash Since 2021 as Capitulation Intensifies: Analyst

Bitcoin has recorded $2.3 billion in realized losses, marking what analysts describe as one of the largest capitulation events in the cryptocurrency’s history — rivaling the 2021 crash and the 2022 Luna/FTX collapse.

$2.3B in Realized Losses

According to CryptoQuant analyst IT Tech, Bitcoin’s seven-day average realized net losses reached $2.3 billion, placing the current downturn among the top 3–5 loss events ever recorded for BTC.

“This is one of the largest capitulation events in BTC history, rivaling the 2021 crash, 2022 Luna/FTX collapse, and mid-2024 correction,” IT Tech wrote.

“Only a handful of moments in Bitcoin's history have seen this level of capitulation.”

Realized losses occur when investors sell at prices below their cost basis — a common signal of panic-driven selling among short-term holders.

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Bitcoin Down Nearly 50% From Peak

Bitcoin has fallen nearly 50% from its October all-time high above $126,000, recently trading around $66,600 after rebounding from a low near $60,000 on Feb. 6.

The sharp decline has triggered widespread short-term holder capitulation, adding significant sell-side pressure to the market.

Relief Rally — or Beginning of a Slow Bleed?

While extreme realized loss spikes have historically preceded rebounds, analysts caution against assuming an immediate recovery.

Bitcoin briefly reclaimed the $70,000 level earlier this week, but IT Tech warned:

“This could still be the beginning of a deep and slow bleed-out. Relief rallies happen even in prolonged bear markets.”

Historically, major capitulation events can lead to sharp but temporary recoveries before the broader downtrend resumes.

$55K Realized Price Signals Key Zone

CryptoQuant noted that Bitcoin’s realized price sits near $55,000, a level historically associated with bear market bottoms.

“Past cycles saw BTC trade 24% to 30% below this level before stabilizing. When BTC reaches this area, it usually moves sideways before recovering.”

If history repeats, Bitcoin could temporarily dip below the realized price before forming a sustained base.

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Analysts See Potential Support Between $40K–$60K

Nick Ruck, director at LVRG Research, said the capitulation reflects:

“Intense short-term holder panic and washout amid broader macro pressures and a shift into bear market territory.”

While oversold conditions often precede recovery phases, Ruck believes the full bottom may require additional confirmation, including:

• Sustained institutional accumulation

• Miner stabilization

• Broader macro improvement

He identified potential support in the $40,000 to $60,000 range, consistent with projections from other market analysts.

Is This the Bottom?

Capitulation events of this scale are historically rare and often occur near major cycle inflection points. However, market structure and macroeconomic conditions suggest volatility could persist before a definitive bottom is established.

Whether Bitcoin stabilizes near current levels or enters a deeper correction phase will likely depend on:

• Institutional flows

• Miner selling pressure

• Broader liquidity conditions

• Macro risk appetite

For now, the data confirms one thing: this is one of the most significant realized loss events in Bitcoin’s history.

See all our insights: Bitcoin World News