Bitcoin capitulations abound as data shows realized and unrealized losses at record highs

With three weeks to go before the FTX collapse, Bitcoin (BTC) analysts are combing through data to decipher if further selling will persist or if a bear market bottom has been hit.

One thing miners, short-term and long-term holders have in common is that they are losing in the bitcoin market right now.

According to an on-chain analysis by Glassnode, the magnitude of both realized and unrealized losses among Bitcoin holders is one of the most severe capitulation events in BTC history. The capitulation keeps all groups from the increasing number of bankruptcies and dwindling miner revenues.

Bitcoin’s realized losses are the fourth-largest on record, while unrealized losses are mounting

November recorded $10.8 billion in 7-day realized losses for Bitcoin. The largest recorded realized loss in Bitcoin history was June 2022 when $19.8 billion was recorded. Such losses show that a large volume of Bitcoin has changed hands at discounted prices.

Bitcoin realized 7-day losses. Source: Glassnode

A popular saying about crypto investing is, “You can’t lose if you don’t sell.” Unrealized losses track the entire Bitcoin market versus total market cap. The 56% unrealized loss in November 2022 is the largest in the current bear market. In 2014-2015, the unrealized losses for bitcoin holders reached an all-time high of 86%. The current unrealized losses are the fourth largest in Bitcoin history.

According to Glassnode analysts:

“This metric recently peaked at 56%, which is the highest for this cycle and is comparable to previous bear market bottoms.”Bitcoin unrealized losses 7-day moving average. Source: Glassnode

Block times slow down as bitcoin miners struggle

Bitcoin investors aren’t the only group capitulating in the current market. Bitcoin miners are struggling to remain profitable amid depressed prices.

There it is. Hash Ribbon Miners Capitulation Confirmed Triggered by the $10 trillion FTX scam and subsequent collapse, bitcoin miners are now going bust and the hash rate is trending down. pic.twitter.com/TorX7PzrNu

— Charles Edwards (@caprioleio) November 28, 2022

As Bitcoin miners are under pressure to remain financially viable, this is affecting the BTC mining hash rate. A decrease in Bitcoin’s hash rate slows down BTC transactions. According to the HashRate Index, block times reached over 11 minutes.

Bitcoin hashrate is falling like a stone↘️

Bitcoin’s 7-day average hashrate is currently 236 EH/s, down 14% from ATH’s 274 EH/s

The block times are therefore slow: 11 minutes and 12 seconds on average in this epochhttps://t.co/JN7OmpJ8X0 pic.twitter.com/ckxqEqOGqX

— Hashrate Index (@hashrateindex) November 28, 2022

Despite the current challenges, analysts believe a capitulation is healthy to start the next bull run. Glassnode Notes:

“A consistent event that motivates the transition from a bear to a bull market is the dramatic realization of losses as investors give up and capitulate on a large scale.”

With so many groups currently at a loss at this stage of the bear market following the FTX collapse, Bitcoin and broader market sentiment need to improve to stimulate fresh money for a bull run. Without improved sentiment, the capitulation may not match previous Bitcoin cycles.

The views, thoughts, and opinions expressed herein are solely those of the authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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