Bitcoin crashes with 2.3 billion losses – does the long bear market start now?

The crypto market is once again under heavy pressure. According to recent data, Bitcoin has suffered more than $2 billion in realized losses in what analysts describe as one of the biggest capitulations of its history.

Such events are rare, and when they do occur, they often mark a crucial phase in the market cycle.

Losses at the level of previous crashes

The magnitude of the recent losses puts this correction in the same league as the 2021 crash, the collapse around Luna and FTX in 2022, and the sharp pullback in mid-2024. Only a handful of moments in Bitcoin history have seen comparable panic selling.

Since peaking above $126,000 in October, the Bitcoin price has almost halved. Although Bitcoin recently managed to bounce back briefly, the general picture remains that of a market in which mainly short-term investors capitulate and close positions with significant losses.

Historical pattern: first pain, then recovery

Extreme loss spikes have regularly preceded recovery rallies in previous cycles. Still, analysts warn that this does not guarantee a quick turnaround.

Even in prolonged bear markets, temporary upswings occur. These so-called relief rallies can be misleading if the underlying trend remains downward.

Important in this context is the realized price of Bitcoin, a level that historically is often associated with eventual bottoms. In previous cycles, the price fell tens of percent below this before stabilization occurred. That suggests there may still be room to downside before a sustainable bottom is formed.

Macro pressure and panic among short-term holders

According to market analysts, the current capitulation reflects a combination of factors: deteriorating macro conditions, declining liquidity and increasing investor uncertainty.

Investors who recently entered in particular seem to be throwing in the towel, which is typical of the later phases of a declining market. At the same time, clear signals of structural recovery are still lacking, such as continued institutional inflow or stabilization among miners.

Without such confirmation, the risk remains that the market will have to bottom out further before a new upward cycle can begin.

How deep can Bitcoin fall?

Estimates for possible support zones vary, but many analysts point to a broad band between roughly $40,000 and $60,000. That range is in line with historical patterns in which Bitcoin only finally settles down after a prolonged exhaustion phase.

The most important conclusion is therefore not so much that capitulation has taken place, but that such moments rarely mean the immediate end of the pain. More often, they mark the start of an extended period of weakness, during which time, not just price, further depletes the market.

While extreme pessimism could ultimately provide the breeding ground for a new bull market, that point may not yet appear. As long as macro pressures persist and compelling purchasing power remains elusive, the risk remains that Bitcoin is in a slow, drawn-out bear market.