New Whales Trapped at $72,000, Warning of Bitcoin Market Plunge

▲ Bitcoin Whale

On-chain analysis shows that newly entered mega whales in the Bitcoin (BTC) market are facing billions of dollars in unrealized losses, putting them at risk of sinking.

According to cryptocurrency media outlet Cointelegraph on Feb. 18 (local time), the average purchase price of new whales who entered the market following the launch of spot Bitcoin ETFs remains above the current market price. Blockchain analytics firm CryptoQuant confirmed that the market value to realized value (MVRV) ratio of large addresses holding more than 1,000 BTC has fallen below 1. A decline in the MVRV ratio indicates that major addresses, including institutional investors, are sitting on paper losses, significantly dampening market sentiment.

Analysts estimate that the average acquisition cost of these new whales is around $72,000. After Bitcoin hit a new all-time high last October, a sharp correction followed, leaving institutional investors who deployed substantial capital underwater for weeks. Although previous bull cycles have also seen large investors endure periods of losses, analysts note that with the higher proportion of institutional capital today, the market’s downside support is being put to the test.

The situation is not much different for short-term holders. More than 90% of the recent purchases by retail investors who entered the market are now in unrealized losses. As sentiment plunges into extreme fear territory, if investors unable to withstand the pressure begin capitulating, the market could face additional price corrections. However, on-chain data has yet to detect signs of large-scale selling by major whales.

Historically, Bitcoin’s retest phase after reaching a new high has lasted anywhere from three to six months. Experts assess that the current loss phase may instead serve as a process of removing market froth and strengthening fundamentals for long-term growth. In particular, capital inflows through major asset managers such as BlackRock are less sensitive to short-term volatility and are expected to play a pivotal role in establishing a solid market bottom.

Ultimately, how long new whales can endure their losses is likely to be a key variable determining Bitcoin’s future price direction. As exchange reserves decline and long-term holders strengthen their accumulation stance, the resolution of supply-demand imbalances could signal the start of a full-fledged recovery. With institutional investors demonstrating strong holding conviction, the market appears to be weathering heightened volatility while consolidating a new support base.

Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses resulting from it. The content should be interpreted for informational purposes only.