‘Intense Capitulation’ Hits Crypto as 8M BTC, Bulk of ETH Supply Sit at Loss
Crypto is deep in a selloff, with over 8 million BTC and most ETH supply underwater as bearish sentiment and another Bitcoin retest loom.
Intelligence analysis by GPT-5.4 Mini
On-chain data points to a broad market reset: more than 8 million bitcoin are sitting at a loss, and most ether supply is underwater too. Decrypt says traders remain bearish, with Myriad users assigning a 75% chance that Bitcoin retests $55,000.
Crypto prices are falling so hard that many people who bought bitcoin and ether now have less money than they put in. It is like a class test where lots of students are suddenly getting low scores at once, and everyone is waiting to see if the grade can stop dropping.
Analysis
Market reset
Decrypt says crypto is going through an "intense capitulation" phase, with on-chain data showing how severe the drawdown has become. Glassnode posted Tuesday that more than 8 million BTC are now sitting underwater, after nearly half of Bitcoin’s circulating supply had been in profit near the cycle peak.
The same article says the bulk of Ethereum’s supply is also at a loss, reinforcing that the weakness is not isolated to one asset. The framing is that the market has moved from a profitable peak phase into a broad reset, where a large share of holders are no longer in the green.
Sentiment remains weak
Decrypt also points to bearish expectations in its Myriad market, where users gave Bitcoin’s retest of $55,000 a 75% chance. That lines up with the broader tone of the piece: Bitcoin’s underperformance has weighed on the 2026 crypto drawdown, and that pressure has spread across altcoins.
The article notes that during capitulation phases, "future winners separate themselves from the field," a view that implies this kind of washout can reveal which assets hold up best once the selling slows. But the immediate picture is still one of broad pain, with underwater supply and negative sentiment dominating the market narrative.
Key points
- Glassnode says more than 8 million BTC are now sitting at a loss.
- The article says the bulk of Ethereum supply is also underwater.
- Decrypt describes the market as being in an "intense capitulation" phase.
- Myriad users gave Bitcoin’s retest of $55,000 a 75% chance.
- The selloff is being framed as a broad reset after a cycle peak.
If this capitulation flushes out weak holders, the market could eventually form a cleaner base. The article suggests that in these phases, future winners separate themselves from the field, which points to a possible sorting-out process once selling pressure eases.
If Bitcoin keeps underperforming, the drawdown could continue to weigh on the whole crypto market. More supply could stay underwater, keeping sentiment bearish and making it harder for altcoins to recover.
