Bitcoin’s drop below $80,000 has put more than 60% of spot BTC ETF investors in unrealized losses. This critical threshold is reigniting fears of capitulation, as the market continues to digest a 37% correction in the absence of bullish fundamentals.
Spot Bitcoin ETF holders are nearing capitulation
Since its October 2025 peak, Bitcoin’s price has fallen 37%, dropping from $126,000 to $78,000. This decline has sparked 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 past 15 months in a difficult position, forcing them to liquidate their leveraged positions or pushing them closer to capitulation.
The Bitcoin price is also trading below the average acquisition cost of U.S. spot Bitcoin ETFs, which is around $84,000. By erasing more than a year of gains, over 60% of the capital invested since the ETFs’ inception is now in paper losses.
Bitcoin ETF Volume Trends
With an average purchase price of around $84,000, the average investor is facing an unrealized loss of 8% to 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 lower prices.
Could Bitcoin’s bear market already be over?
At first glance, market conditions remain bearish. ETF volumes are leaning toward outflows despite a day of gains, and the macroeconomic environment is too pessimistic to foresee a rebound in demand for BTC.
However, certain technical and behavioral signals are beginning to suggest a possible transition phase, rather than a direct continuation of the downtrend.
One indicator pointing in this direction is the RSI (Relative Strength Index) on the weekly chart, which is hovering around 32—the lowest level since the low point of the 2022 bear market.
BTC Price and RSI
Historically, such RSI lows have often coincided with oversold conditions for BTC, which are conducive to technical rebounds. This does not necessarily mean that the bear market is over, but that selling pressure could soon ease.
Furthermore, the adoption of Bitcoin as a means of payment shows no signs of slowing down. The Lightning Network, a Layer 2 solution, enables instant transactions at very low cost and is currently experiencing a significant increase in activity as well as in the liquidity locked in its channels.
Other Bitcoin sidechains and Layer 2 solutions are also seeing strong growth. The Liquid sidechain is recording record activity, while new networks like Arkade and Spark are emerging, making it easier to hold BTC and access transactions via Lightning.
