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Bitcoin has recovered slightly from yesterday’s selling, although it is still structurally fragile as on-chain data, ETF flows and liquidity conditions point to a downside risk. Price action suggests the current decline is not merely a short-term correction. It can be a larger shift in market structure due to the weakening holder conviction.
On-chain metrics show that Bitcoin is now trading below the realized cost basis of the 12-18 month holder cohort. This group is typically associated with cycle stability instead of speculative trading.
Historically this cohort’s realized price has been a key inflection point between healthy pullbacks and prolonged bearish regimes.
Since Bitcoin is trading below the $80,000 realized price level for this group, a major portion of medium-term holders have moved into unrealized losses.
In previous cycles sustained trading below this cost basis coincided with extended drawdowns, not quick recoveries. The holders often use rallies to exit positions and create persistent overhead supply.
While total balances remain high, the rate of balance growth has flattened, indicating reduced marginal conviction.
US spot Bitcoin ETFs have recorded approximately $5.7 billion in net outflows since October 2025, with $1.49 billion in the last week, marking three consecutive months of capital withdrawal.
This sustained outflow signals declining institutional risk appetite during a period of uncertainty.
At the same time, liquidity conditions across global markets have tightened sharply. Estimates suggest a $300 billion drain from the financial system, reducing dollar availability and leverage capacity.
Bitcoin, which remains highly sensitive to liquidity expansion and contraction, has struggled to attract fresh inflows under these conditions. As a result, BTC is now trading over 30% below its recent peak.
Bitcoin has experienced a sharp downturn over the past week, with total liquidations of nearly $362.28 million, according to Coinglass data.
Of these, $132 million was long positions, indicating significant bullish exposure. Over 110,000 traders were liquidated, and the largest single liquidation occurred on Hyperliquid exchange.
Traders should be cautious, as such price dips could trigger further liquidation among leverage traders.
Also Read: BTC Drops 2.5% Near $74,500, the Lowest Level Since Trump’s Return
Bitcoin’s weekly chart closed below the 200-week Exponential Moving Average (EMA) at $85,836 and the the 61.8% Fib level at $78,490 last week.
Since mid-January, the BTC price has been dropping sharply, by nearly 12% in last week. Traders should be cautious as the downside may not be complete yet.
As of this week on Tuesday, BTC rebounded to $78,000, retesting the April 2025 low of $74,508. If BTC continues its correction, it could extend the fall toward the next weekly support at $71,280.
The Relative Strength Index (RSI) on the weekly chart is at 34, near the oversold territory, indicating strong bearish momentum.
Moreover, the Moving Average Convergence Divergence (MACD) indicator on the same chart also showed a bearish crossover in mid-August, which remains intact, further supporting the negative outlook.
At the time of writing on Tuesday, BTC is trading at $78,286. If BTC continues its correction, it could extend the decline toward the key psychological level at $70,000.
