Key Insights:
- Bitcoin price fell below the realized cost basis of 12-18-month holders, signaling a potential shift into structural bearish territory.
- Stablecoin flows reversed from $9.7 billion monthly inflows in October to $4 billion in outflows by February.
- Smart money positioning became extremely bearish across major exchanges, whereas retail sentiment remained bullish.
Bitcoin (BTC) price fell below the realized price for the 12-18 month UTXO age band, a cohort that has historically reflected medium-term conviction and cycle stability. CryptoQuant analyst Crazzyblockk noted that this cost basis represents capital accumulated during prior phases.
It is a statistically important threshold for market structure analysis. When BTC price breaks and sustains below this level, market behavior shifts from normal corrections to a structural bearish regime rather than a short-term pullback.
Balance data showed this cohort still holding a large share of supply, with 30-day balance changes remaining positive. However, the rate of accumulation has been slowing dramatically.
The deceleration signals weakening marginal conviction rather than aggressive dip buying. This pattern has often preceded broader distribution phases in previous cycles.
Meanwhile, the realized price itself remained relatively stable. That reinforces its role as overhead resistance where rallies tend to fail as supply seeks breakeven exits.
Stablecoin Liquidity Evaporates After October Peak
The crypto market entered a delicate phase marked by a structural liquidity shortage amid persistently high uncertainty, according to CryptoQuant analyst Darkfost.
After a spectacular expansion of more than $140 billion since 2023, the total stablecoin market capitalization declined in December. That ended a sustained growth trend. The most telling signal came from stablecoin flows to exchanges. It flipped dramatically from inflows to outflows.
In October, the market showed exceptional momentum, with average monthly stablecoin netflows exceeding $9.7 billion. Nearly $8.8 billion of that was concentrated on Binance alone.
This abundance of liquidity supported the Bitcoin USD rally toward a new all-time high. Since November, the landscape has changed, with these net inflows largely wiped out.
After an initial sharp decline of $9.6 billion, followed by a brief stabilization period, stablecoin flows turned negative again with more than $4 billion in outflows. $3.1 billion also outflowed from Binance.
Recent months have seen a rise in risk aversion. Some later entrants even capitulated, withdrawing their stablecoins from exchanges.
Darkfost noted that these movements may also reflect internal adjustments at exchanges, with some platforms removing underutilized stablecoins due to low demand.
The dynamics highlighted a particularly challenging environment in which the Bitcoin price currently operates. It’s weighed down by persistent liquidity constraints.
Bitcoin Price in Trouble as Smart Money Turns Bearish
CoinGlass data revealed a dangerous divergence in positioning across cryptocurrency markets. Overall sentiment showed 36% very bullish and 18% bullish, with retail traders maintaining optimistic positioning. However, smart money sentiment told a different story.
On Binance, retail long/short ratios stood at 2.52, with extremely bullish sentiment, while smart money sentiment was extremely bearish. OKX showed similar dynamics to retail: 2.41 bullish for retail and 0.74 extremely bearish for whale accounts.
Bybit displayed the starkest contrast, with retail at 2.47 bullish while smart money positioned extremely bearish.
The 4-hour taker buy/sell volume showed shorts slightly dominating, at $8.55 billion, versus longs at $8.3 billion, for a 50.74% to 49.26% split. This positioning suggested institutional capital was prepared for further downside while retail traders fought the trend.
Market Structure Points to Extended Bitcoin USD Price Consolidation
From a cycle perspective, Bitcoin USD price is trading below the realized cost. Medium-term holders show negative unrealized profitability. Balance growth is also slowing. Historically, this combination has aligned with extended bearish phases.
Crazzyblockk warned that until BTC price reclaims the realized price level with renewed accumulation momentum, market structure will continue to favor consolidation, fragile rebounds, and elevated downside risk rather than a confirmed recovery.
The liquidity deficit stands in sharp contrast to other asset classes, such as precious metals and equity markets, which continue to attract both attention and capital.
Without a resurgence in stablecoin flows or a decisive Bitcoin price breakout above the medium-term holder’s cost basis, the market faces continued pressure, as smart money positioning reflects expectations for lower prices ahead.