Bitcoin’s decline below $80,000 puts over 60% of spot BTC ETF investors at an unrealized loss. This critical threshold is reigniting fears of capitulation, as the market is still digesting a 37% correction in the absence of bullish fundamentals.
Spot Bitcoin ETF holders are approaching capitulation
Since its peak in October 2025, the price of Bitcoin has fallen 37%, from $126,000 to $78,000. This decline has caused panic among investors, the majority of whom now anticipate a new bear market that would push BTC even lower. By falling back below $80,000, Bitcoin is putting all buyers from the last 15 months in a difficult position, forcing them to liquidate their leveraged positions or bringing them closer to capitulation.
The price of Bitcoin is also trading below the average acquisition cost of US spot Bitcoin ETFs at around $84,000. Erasing more than a year of gains, more than 60% of the volumes entering since the creation of ETFs are now at a paper loss.
With an average purchase price of around $84,000, the average investor is suffering an unrealized loss of 8-9%.
On Monday, ETFs recorded $561 million in net inflows, their best performance since mid-January. This surge in interest could suggest that some investors are taking advantage of this downturn to accumulate at a reduced price.
Could Bitcoin’s bear market already be over?
At first glance, market conditions remain bearish. ETF volumes are leaning toward withdrawals despite a day of gains, and the macroeconomic context is too pessimistic to envisage a return of demand for BTC.
However, certain technical and behavioral signals are beginning to suggest a possible transition phase, rather than a direct continuation of the decline.
One indicator pointing in this direction is the weekly RSI (Relative Strength Index), which is hovering around 32, the lowest level since the low point of the 2022 bear market.
Historically, such RSI lows have often coincided with oversold areas for BTC, which are conducive to technical rebounds. This does not necessarily mean that the bearish cycle is over, but that selling pressure could soon lose intensity.
Furthermore, the adoption of Bitcoin as a means of payment shows no signs of slowing down. The Lightning Network, a second-layer (Layer 2) solution, enables instant transactions at very low cost and is currently experiencing a significant increase in activity and liquidity locked in its channels.
Other Bitcoin sidechains and Layer 2 solutions are also experiencing strong growth. The Liquid sidechain is recording record levels of activity, while new networks such as Arkade and Spark are emerging, facilitating BTC ownership and access to transactions via Lightning.
