According to latest weekly report, Bitcoin has experienced a dramatic 26% drop from $98,000 to $72,000 in the past month, marking the most intense on-chain stress indicators since the FTX collapse. The data reveals a market experiencing full capitulation, as institutional demand diminishes while forced selling intensifies. The figures are striking. BTC’s MVRV Z-Score, a crucial profitability indicator that assesses the relationship between market value and realized value, has contracted to levels reminiscent of October 2022. In the latest developments, the 7-day average of realized losses has skyrocketed past $1.26 billion per day, with single-day peaks surpassing $2.4 billion amid the most intense selling pressure. The price has now dropped significantly beneath the True Market Mean at $80,200, a threshold that has historically served as the ultimate support during minor corrections. This metric removes dormant coins and early miner holdings to reveal the actual location of active capital. According to analyst Chris Beamish, “losing it confirms a deterioration that has been building since late November.”
The current configuration is starting to echo the early 2022 scenario—a tense phase when Bitcoin shifted from erratic range-bound trading into a complete bear market. The Realized Price currently sits at approximately $55,800, establishing the lower boundary where long-term holders have historically re-entered the market. Perhaps more concerning than the selling itself is the identity of those who are not participating in the buying. Spot volumes continue to exhibit a “structurally weak” trend, even in the wake of the significant price drop. The 30-day volume average showed little change despite BTC losing a quarter of its value—a classic case of a demand vacuum. Institutional flows have turned negative across the board. Spot ETFs, corporate treasuries, and government-linked buyers are all retreating. This signifies a significant turnaround from the growth phase when these allocators consistently offered bid support. “With institutional and treasury demand no longer providing a reliable bid, downside risk remains elevated,” the report states. Any bounces should be viewed as corrective rather than indicative of a trend reversal until these flows stabilize. Derivatives markets are witnessing the most significant long liquidation cascade throughout the entire drawdown period. The flush-out intensified as the price dipped below the mid-$70,000s, with forced selling exacerbating volatility and expanding intraday ranges.
The narrative from the options markets aligns perfectly. During the retest of $73,000, short-dated implied volatility surged to nearly 70%, with one-week IV increasing by approximately 20 points over the span of two weeks. Downside skew has intensified—traders are aggressively investing in put protection instead of preparing for a rebound. The 1-week volatility risk premium has shifted into negative territory for the first time since early December, now standing at approximately -5, a significant decline from +23 just a month prior. When implied volatility trades below realized volatility, gamma sellers begin to incur losses, creating mechanical pressure instead of absorbing it. On-chain distribution data reveals significant accumulation in the range of $70,000 to $80,000, highlighted by a particularly dense supply cluster between $66,900 and $70,600. Cost-basis concentrations frequently serve as short-term shock absorbers, balancing the dynamics between sell-side pressure and responsive demand.
BTC was priced at $76,180 at press time Wednesday, reflecting a 4% increase in the last 24 hours after a weekend dip close to $74,600. The bounce occurred as precious metals continued their upward trajectory, although the correlation with risk assets remains high. Dan Morehead has once again emphasized his optimistic outlook, asserting that Bitcoin is poised to “massively” surpass gold in performance over the next ten years. However, the on-chain verdict is unmistakable: until there is a significant return of spot demand, any rallies will encounter immediate resistance at the $80,200 True Market Mean overhead.