Bitcoin avoids a plunge below $60,000 but remains in capitulation, signaling a red flag for further declines
Bitcoin avoids a plunge below $60,000 but remains in capitulation, signaling a red flag for further declines
Bitcoin (BTC) is showing a temporary rebound after a sharp drop that threatened the $60,000 support level, but on-chain data indicates that a capitulation process is still underway, warranting caution over the potential for further downside.
According to cryptocurrency-focused media outlet BeInCrypto on February 8 (local time), Bitcoin’s price fell toward the $60,000 level before recovering quickly, but it remains too early to be confident about a trend reversal. Editor Harsh Notariya analyzed that the relative unrealized loss metric, which measures the value of coins in a loss relative to total market capitalization, surged to 24% when Bitcoin plunged to $60,000. This figure significantly exceeds the typical transition zone between bull and bear markets, indicating that the market has clearly entered a bearish phase.
Notariya explained that historical data shows the relative unrealized loss metric tends to exceed 50% during the worst stages of capitulation. The current level of 24% is interpreted as a signal that Bitcoin is going through an active capitulation process rather than having reached a final bottom. While selling pressure is widespread across the market, it has not yet been fully exhausted, making additional volatility inevitable until a price equilibrium is found.
An examination of supply distribution by wallet size shows that retail investors holding less than 0.01 BTC are reacting emotionally to price fluctuations yet steadily increasing their holdings. In contrast, mid- to large-sized wallets holding between 10 BTC and 10,000 BTC have shown subtle distribution during this downturn. Although sentiment on social media is extremely negative, small investors appear to view current prices as undervalued and are quietly expanding their exposure. This imbalance suggests that optimism has not been fully reset, and rebound momentum may remain limited until clear capitulation among retail investors emerges.
Despite price weakness, the number of new Bitcoin addresses surged sharply over the past week. The number of investors initiating on-chain transactions for the first time rose by approximately 37%, indicating a steady influx of new participants even during a market correction. Growth in new entrants underscores continued confidence in Bitcoin’s long-term value and could provide strong downside support during consolidation periods. However, if macroeconomic pressures persist, network growth alone may be insufficient to overcome broader risk-off sentiment.
Bitcoin is currently trading around $69,077, defending against short-term downside pressure. If the $63,007 support level breaks, there is a risk that losses could deepen toward the historical support zone near $55,500. For a short-term recovery, it is essential to reclaim and stabilize above $71,672, as securing this level would allow Bitcoin to escape the immediate bearish structure.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for investment losses based on it. The content should be interpreted solely for informational purposes.*
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