1. Bitcoin remains trapped in a fragile $81K–$89K range with thinning liquidity and rising realized losses.
2. Short-term loss dominance signals weak demand, while long-term holders still show some profit realization.
3. Options and futures data indicate cautious positioning, with upside capped and downside risk not fully cleared.

The prices of Bitcoin have been oscillating around a tight range of $81K-89K that indicates that the market is under stress. A recent report by Glassnode shows that since the beginning of October, BTC has been trading below the short-term cost of holding basis of $104.6K.

This change puts bitcoin in a liquidity-thin, low-demand zone, which is reminiscent of the actions in Q1 2022 after the ATH.

This structural range is now being guided by the Active Realized Cap Price and the True Market Mean, which are measures of coins that are held by active investors and those that are acquired in the secondary market.

The weak inflows and the weak liquidity are restricting price movement, keeping the market confined and prone to additional weakness.

Surge in Entity-Adjusted Realized Loss Signals Investor Exit

Entity-Adjusted Realized Loss (30D-SMA) has soared to 403.4 million a day, which is higher than the previous losses recorded in major lows in the present cycle. This increase in the realized losses means that more investors are getting out at a loss as the momentum wanes away, losing faith in the uptrend.

The STH Realized Profit/Loss Ratio, which measures the profit against the loss of recent investors, has crumbled to 0.07x, a long way below the neutral figure of 4.3x. This is such domination of losses, which proves that liquidity is evaporating.

In case these levels are not broken, then Bitcoin runs the risk of repeating the weakness of Q1 2022, and a possible break below the True Market Mean at around 81K.

However, long-time holders continue to get profits. The LTH Realized Profit / Loss Ratio 7D-SMA is at 408x, which exceeds the stress levels observed in previous cycle lows. This indicates a degree of strength, although a further decline to 10x would be an indicator of a shift to a more serious bear market.

Bitcoin Options Activity Hits Record Levels

Off-chain statistics reflect a wary derivatives market. Futures OI is steadily declining, and the deleveraging is being done in an orderly manner, with few forced liquidations. The perpetual funding rates are kept close to the neutral level, and hence there is no indication of either aggressive long or short position.

BTC-based contracts have been experiencing exceptionally high levels of options activity and open interest. Distribution of strikes indicates concentrated puts around $84K and call interest around $100K, resulting in a narrow trading range.

The positioning of dealers means that the potential to have an increase is limited, but the risks of downside are not eliminated. Skew in the short run is no longer as high, with crash-immediate fear decreased, but skewness in the long run is still high, indicating that there is still tail-risk until 2026.

Also Read: Strategy Will Keep Bitcoin Safe Without Selling During Next Market Crash