Recent buyers Bitcoin (BTC) have realized $2.16B in losses

The latest Bitcoin (BTC) downturn was a stress test for recent buyers, who did not display any signs of ‘diamond hands’ and decided to cut their losses. For the last three days, the latest cohort of new wallets sold and realized a loss of $2.16B. 

New Bitcoin buyers with wallets aged under three months, realized the biggest losses during the market downturn. In total, those who bought near the top realized losses of $2.16B as they decided to cut losses and avoid holding to a lower drawdown.

The biggest capitulation came from traders who bought BTC during the last week, colliding with a period of fearful sentiment and increased volatility. 

Over 42% of sellers held their coins for less than a week and sold under pressure. The group that bought before the peak bull market at the end of 2024 was the most likely to hold onto their coins based on Glassnode data. 

Short-term holders panic-sold during the current drawdown. The trend to realized losses resembles the drawdown from early January when BTC dipped to $92,000. At that point, traders capitulated and took losses before the market recovered above $100,000. 

In the past three days, the ratio of realized profits to losses sank into the red again, with a similar drawdown and selling. Net unrealized profit for Bitcoin is still 53% on average, pointing to the current price as the top of the cycle. The bear market lows of 2022 had an average net unrealized loss of 10%. 

Whales and retail retain most of their Bitcoins

The recent selling did not change the balance of whale to retail wallets by a lot, as most holders retained their positions. However, in the short term, the BTC drawdown liquidated the greediest traders and shook out the holdings of the fearful ones. Wallets of all sizes retained their count from the past quarter, though whales with over 10K BTC sold at the peak. 

The group of wallets with over 10K BTC decreased the most rapidly, as some entities shifted their coins. However, the ratio between retail and institutional addresses remains roughly unchanged in the past weeks. 

Miners and corporate holders still hold onto the BTC they absorbed, with miner reserves rising slightly to 1.94M coins. 

In the longer term, BTC is still potentially expecting a supply crunch, even as some traders capitulate. On February 26, ETFs were among the biggest sellers, though they only decreased their holdings by 754.6 BTC, lower than two days’ worth of newly mined coins. Despite the days in the red, for Bitcoin, a drawdown like this is seen as yet another transfer from weak hands to strong holders. 

Bitcoin corporate treasuries now hold 3.13M coins, down from a recent peak of 3.3M, reflecting the outflows from ETFs. Corporate miners hold onto their reserves, with a small addition to the portfolio of Strategy (MSTR), now holding 499,096 BTC.

Whale are returning to the market

Spot buyer whales have returned to the market, with two large-scale buyers noted on Binance and Kraken. Both whales withdrew just under 1,000 Bitcoins. 

A Bitfinex whale also withdrew 5,000 BTC to an unknown wallet, and others accumulated from Coinbase. 

A riskier trader on Hyperliquid lost their long positions during the market drawdown but returned with a 5M USDC deposit, hoping for a change of direction. 

A whale has lost $27.6M from going long $BTC, $SOL, $ETH, $HYPE $ONDO, $HBAR, $SUI and $TRUMP with 2 wallets.

6 hours ago, this whale created a new wallet and deposited 5M $USDC to #Hyperliquid to go long $ETH, $LTC, $SOL and $HYPE again.https://t.co/HBfYU20L8Z… pic.twitter.com/AsD4fHdICG

— Lookonchain (@lookonchain) February 27, 2025

After the initial sell-off, Bitcoin is starting to see the formation of a new buy wall, which is slowly eating into the sell orders. Traders are highly active in the $86,000 range, with rapid shifts between buying and selling pressure. 

On Bitfinex, a notable whale has accumulated 3,200 BTC on margin, as noted by economist Alastair Milne. The appearance of whale buyers on Bitfinex is often the signal for a change of market direction. The accumulation of a large leveraged position at this point may be an indicator that the worst of the drawdown is over, and Bitcoin may continue its recovery or trade sideways.

Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More