Bitcoin Experiences Major Capitulation with Billions in Realized Losses

The global cryptocurrency market recently underwent a significant contraction, marked by one of Bitcoin's most substantial capitulation events on record. Over a seven-day period concluding on Thursday, February 12, 2026, the asset recorded an average of $2.3 billion in net realized losses. This figure positions the market stress event among the top three to five largest ever documented for the digital asset.

This intense selling pressure included a notable single-day loss spike of $3.2 billion on February 5, 2026, which exceeded the $2.7 billion realized loss observed during the Terra/Luna collapse in 2022. Bitcoin was trading near $66,409 on February 13, 2026, a notable decrease from its all-time high above $126,000 reached in October 2025, following a recent low near $60,000 on February 6, 2026. The broader digital asset sector has also reflected this strain, with the total crypto market capitalization declining by nearly $2 trillion since the October peak.

Analysis from CryptoQuant, through analyst IT Tech, placed the recent downturn in scale alongside the 2021 crash and the 2022 Luna/FTX implosion, noting that such extreme loss spikes have historically preceded market rebounds. However, IT Tech introduced a cautionary note, suggesting the event “could still be the beginning of a deep and slow bleed-out,” referencing the common occurrence of relief rallies within protracted bear markets. Standard Chartered further adjusted its outlook, revising its year-end 2026 forecast for Bitcoin down to $100,000 from an initial projection of $150,000, while warning of a possible initial decline to $50,000 before any recovery.

On-chain indicators are presenting mixed signals regarding the market's immediate future. CryptoQuant's MVRV Adaptive Z-Score registered at -2.66, confirming Bitcoin remains in the capitulation zone, which historically suggests the market is nearing an accumulation phase. The realized price, often associated with bear market bottoms, is situated near $55,000, with past cycles indicating stabilization often occurs when the price trades 24% to 30% below this level.

Nick Ruck, Director of LVRG Research, attributed the sharp selling to “intense short-term holder panic and washout amid broader macro pressures and a shift into bear market territory.” Ruck suggested that while conditions indicate oversold territory, establishing a definitive bottom may require sustained institutional accumulation. Analysts are currently targeting support zones between $40,000 and $60,000, with some projections placing a potential Q4 2026 bottom in the $40,000 to $50,000 range. Contextually, the current realized losses are materializing around the $67,000 level, which some analysts suggest is structurally distinct from the 2022 crash near $19,000, implying the current sell-off is largely a washout of late-cycle leverage rather than a systemic failure.

This market stress is also affecting publicly traded companies. Coinbase reported a $667 million loss in the fourth quarter, with revenue decreasing 20% to $1.8 billion, partially linked to token price declines. In response, Monness, Crespi, Hardt & Co. downgraded Coinbase shares to a 'sell' rating, citing the typical duration of crypto bear markets as a factor making recovery assumptions unrealistic. The divergence between historical rebound precedents and current on-chain warnings of a protracted decline highlights the uncertain directional signals facing investors.