Bitcoin is currently facing a challenging period, with a recent price dip sparking concerns of widespread capitulation among investors. On-chain data and market behavior paint a grim picture, suggesting that the cryptocurrency is deep in a bear-controlled shakeout, with potentially further downside ahead.
Bitcoin's On-Chain Capitulation Deepens
Recent on-chain metrics reveal significant signs of capitulation as Bitcoin's price slides. Short-Term Holders, those holding for less than 155 days, are now realizing losses, having slipped below their $113k cost basis. This indicates that "weak hands" are folding under pressure. Further underscoring this trend, Bitcoin's Net Realized Profit/Loss (NRPL) has flipped negative, accompanied by a staggering $2.75 billion in realized losses over just 72 hours—the steepest spike recorded since April. This confluence of data points to Bitcoin being in a profound shakeout phase, where exit liquidity is directly influencing price action.
The $110k Bull Trap and Bleak Outlook
While a brief 4% bounce at $110k offered a glimmer of hope, it quickly proved to be a classic bull trap. Weak spot demand failed to absorb selling pressure, turning the rebound into an opportunity for overleveraged long positions to be liquidated. CoinGlass data showed a surge in Binance's Long/Short Ratio above 60%, creating a dense cluster of longs that were subsequently squeezed, triggering nearly $1 billion in market-wide liquidations. This event highlighted the thinning bid depth and the market's firm control by bears. With bulls showing no appetite to buy the dip, a breakdown below the $100k psychological level appears increasingly plausible, framing the recent 8% weekly drawdown as FUD-driven capitulation rather than a healthy market reset.
