Data from Glassnode shows loss-taking now outweighs profits, a shift rarely seen outside deep bear phases.

Bitcoin’s on-chain data has flashed a signal that has historically come before prolonged bear market conditions, with the Realized Profit/Loss Ratio confirming a regime shift toward loss-dominant selling.

The move suggests that liquidity is evaporating from the market, forcing investors to realize losses rather than book profits, a dynamic last seen during the deepest crypto winter periods of 2018 and 2022.

Key Metric Flips Below 1 Signaling Capitulation Risk

According to data from on-chain analytics firm Glassnode, the 90-day simple moving average of the Realized Profit/Loss Ratio has officially fallen below 1. The metric, which compares the total value of BTC sold at a profit versus those sold at a loss, indicates that loss-taking now outweighs profit-taking across the network.

“This confirms a full transition into an excess loss-realization regime,” Glassnode analysts noted in a February 24 update on X.

The firm highlighted that historically, breaks below this threshold have persisted for six months or more before reclaiming the 1 level, a recovery that typically signals a “constructive return of liquidity to the market.”

The reading represents the culmination of a trend that began in early February, when the ratio was hovering near 1.5, and late January, when it stood around 1.32.

Furthermore, the current on-chain structure shows confluence with previous bear market bottoms. CryptoQuant contributor _OnChain observed that indicators tied to whale activity, particularly Unspent Profitability Ratios (UPR) for various holder cohorts, have reached levels similar to May-June 2022, a period that preceded significant downside before the ultimate bottom formed later that year.

Market Context and Historical Parallels

The current sell-side pressure follows a dramatic cooldown in profit-taking that occurred in December 2025. Glassnode’s earlier data showed that 7-day average realized profits crashed from over $1 billion in Q4 2025 to just $183.8 million by December, which temporarily allowed Bitcoin to stabilize and rally above $96,000 in early January.

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However, that stabilization proved short-lived as macroeconomic headwinds intensified, with Bitcoin trading at approximately $63,200 at the time of writing, down 3.6% in 24 hours and almost 29% over the past month. The asset is also nearly 50% below its all-time high reached in October 2025.

Analysts have attributed the continued weakness to a combination of macro factors rather than a structural breakdown in Bitcoin’s fundamentals. U.S. President Donald Trump’s recent tariff announcements, including a proposed increase on taxes on global imports, have rattled risk assets across traditional and crypto markets.

Despite the bearish signals, some analysts maintain that Bitcoin’s long-term cycle remains intact. Bitwise CIO Matt Hougan recently framed current volatility as a necessary “teenage state” of monetary evolution, arguing that maturing assets must pass through speculative gradients before achieving institutional stability.

However, chartist Ali Martinez warned that a three-day “death cross” could be confirmed in late February, which foreshadowed final downside moves in 2014, 2018, and 2022, historically leading to additional declines of 30% to 50%.