Bitcoin Faces $27.8 Billion in Unrealized Losses and ETF Outflows as Retail Investors Flee

▲ Retail investor, Bitcoin (BTC) / Gemini-generated image

As Bitcoin (BTC) prices decline, unrealized losses among retail investors have exceeded $27.8 billion, while $8.5 billion has flowed out of spot ETFs, heightening a sense of crisis across the broader market.

According to financial outlet Insider Muna on February 19 (local time), cryptocurrency analytics firm Santiment reported that recent price corrections have pushed unrealized losses among self-custody holders—those who store assets in personal wallets rather than on exchanges—to $27.8 billion. This indicates that even long-term holders, considered the market’s core support base, are not immune to the ongoing downturn.

The situation surrounding Spot Bitcoin ETFs, which reflect institutional investor activity, is also far from optimistic. Recent outflows from Spot Bitcoin ETFs totaled $8.5 billion, reflecting strong profit-taking intentions and risk management strategies among institutions. Large-scale capital withdrawals are constraining market liquidity and acting as a catalyst for further price declines.

According to unspent transaction output (UTXO) data on the Bitcoin network, a significant portion of the total Bitcoin supply is currently held at a loss. Santiment explained, “Each time Bitcoin’s price falls below certain levels, unrealized losses increase exponentially,” pointing to worsening investor sentiment. The firm added that the growing losses among self-custody holders suggest that the market may still be in the process of finding its bottom.

Technical indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) have entered oversold territory, but no clear rebound signal has emerged. Experts warn that unless capital inflows into Spot Bitcoin ETFs resume, the $27.8 billion in unrealized losses could turn into actual selling pressure, delivering a greater shock to the market.

The recovery of institutional capital, a key source of liquidity in the Bitcoin market, is expected to determine the prospects for a price rebound. Only when the current wave of large-scale outflows subsides and fresh buying momentum is secured can long-term holder sentiment stabilize. Market participants are closely monitoring changes in the macroeconomic environment and the possibility of rebounds at key price levels while reassessing their investment strategies.

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