For the first time since October 2023, Bitcoin holders are experiencing net realized losses, marking a significant shift in the cryptocurrency’s profit dynamics. This development suggests a potential transition from a prolonged bull market to early bear market conditions.
Analyzing the Shift in Profit Dynamics
Recent data indicates that Bitcoin holders have realized cumulative losses totaling approximately 69,000 BTC since December 23, 2025. This downturn in net realized profits has not been observed since October 2023, signaling a notable change in market sentiment. The decline in realized profits has been steady since early 2024, with successive lower peaks recorded in January 2024, December 2024, July 2025, and October 2025. This pattern reflects weakening price strength, even as spot prices previously remained elevated.
Comparing Current Trends to Historical Market Cycles
The current market behavior closely mirrors the 2021–2022 bull-to-bear transition. During that period, realized profits peaked in January 2021, followed by a series of lower highs throughout the year, eventually flipping into net losses ahead of the 2022 bear market. Similarly, the present decline in net realized profits—from 4.4 million BTC in October 2025 to 2.5 million BTC currently—echoes the early stages of the previous bear market. This resemblance suggests that the market may be entering a comparable phase of downturn.
Implications for Short-Term and Long-Term Holders
Short-term Bitcoin holders are exhibiting signs of panic selling, with the realized spend-output profit ratio (STH SOPR) dropping below 1. This indicates that these investors are selling at a loss, a classic sign of capitulation. The total value of this panic selling exceeds $3.39 billion, based on a price of $113,000 per coin. Long-term holders, on the other hand, have sold approximately 815,000 BTC over the past 30 days, the highest level since January 2024. This mass sell-off, coupled with contracting demand, is exerting downward pressure on Bitcoin’s price.
Market Outlook and Investor Sentiment
The current decline in net realized profits and the increase in realized losses suggest a loss of strength in Bitcoin’s price momentum. While some analysts caution against reading too much into this data alone, the resemblance to previous market cycles cannot be ignored. Investors should remain vigilant, as these indicators may signal the onset of a bear market. Monitoring on-chain metrics and market sentiment will be crucial in navigating the potential challenges ahead.
As of January 25, 2026, Bitcoin is trading at approximately $88,291, reflecting a decrease of $1,164 (-1.3%) from the previous close. The intraday high reached $89,512, with a low of $88,094. These fluctuations underscore the market’s current volatility and the importance of staying informed during this transitional period.
