Bitcoin is back in that familiar place where the chart looks ugly, the timeline feels loud, and everyone is trying to guess whether the next move is the one that finally breaks the mood.
Today, Bitcoin fell below $70,000 for the first time in well over a year.
Historically, that price still looks strong, especially if you zoom out to any point before 2024. A Bitcoin investor in 2020 would have salivated at the sight of a $69,000 BTC price.
In context, it feels different because this part of the cycle is less about “price is high” and more about “who is actually under pressure.”
That is why long-term holder metrics matter, and why the potential for Bitcoin to fall back to around $40,000 is worth taking seriously.
Long-term holders are the people least likely to flinch. They sit through chop, they sit through headlines, and they sit through drawdowns that would wreck most traders.
When that cohort starts feeling real pain, the market is usually close to exhausting whatever bear energy it has left.
One clean way to explain that pain is the cost basis.
Most of the time, Bitcoin trades above the average price long-term holders paid. When it slides down toward that average, the market starts testing conviction in a way that is hard to fake.
A helpful reference line here is the long-term holder realized price, which is basically the average acquisition price of coins held by long-term holders, commonly defined as coins that have not moved for at least 155 days.
Realized price is a proxy for the cohort’s cost basis. BitBo also presents the same concept, framing it as a historically important support level during bear markets.
Why $40-$50k keeps showing up
The reason I keep coming back to the $40,000 – $50,000 range is that the long-term holder has realized that the price has been climbing over time. It is now in the rough neighborhood of that level. When you look at it through that lens, $40,000 stops being a random round number and starts being a stress test.
It is a place where the market can see what happens when the strongest hands stop feeling comfortable.
That brings us to the two CryptoQuant charts below, which do a good job of showing what “bottom conditions” tend to look like on-chain without much guesswork.
First is the adjusted long-term holder MVRV versus realized price chart.
In plain English, MVRV compares market value to realized value.
When you adjust it for a specific cohort, you are asking a tighter question: Is this cohort sitting on profits or losses relative to its cost basis?
When that adjusted long-term holder MVRV drops below 1.0, it means the cohort is underwater on average.
On the chart, those periods appear as the deep-shaded blocks. They line up neatly with the big bear market lows across multiple cycles.
That is the strongest takeaway. The second takeaway is what it says about where we are today.
The chart shows the Bitcoin price still well above the long-term holder realized price line, and the adjusted LTH MVRV remains above 1.0.
That matters because it suggests the market has not yet reached the historical regime in which the long-term cohort is underwater in aggregate.
If we keep sliding and that ratio keeps compressing, the chart supports the idea that we are moving toward a zone that has historically mattered.
It does not confirm we are already there.
The second chart, long-term holder SOPR, adds a different kind of signal.
SOPR is about behavior at the moment coins are spent. It asks whether coins are being sold for a profit or for a loss.
CryptoQuant’s own guide is direct: values above 1 mean profit-taking, values below 1 mean the cohort is realizing losses.
On the chart, the LTH SOPR line remains above 1 and has been drifting lower. That reads like a thinning profit cushion.
Long-term holders are still mostly spending into profits, and the market is sliding toward a point where that stops being true for a growing share of the cohort.
Historically, the real capitulation moments tend to show up when LTH SOPR slips below 1 and stays there for a while.
That is when long-term holders are finally locking in losses, and that is a very different emotional environment from mild profit-taking.
What on-chain loss pressure says now
That is where the On Chain Mind “LTH Loss Risk Metric” fits neatly into the picture.
Their framing is simple: it tracks the percentage of long-term holder supply held at a loss and treats it as a kind of distress oscillator, a risk.
In their analysis, they highlight previous peaks during major lows and note that today’s reading is around 37%.
The message is that we are not yet in mass underwater territory. Historically, the faster “bottoming process” tends to accelerate when that percentage pushes above the mid-50s into the 60s.
The deepest capitulation zones in prior cycles have been higher still.
Put those three views together, and a consistent story appears.
Price is down, the crowd is nervous, and that feels like a bear market.
The long-term cohort is still mostly above water, which means demand has not yet forced the hardest kind of selling. The charts support that.
The adjusted long-term holder MVRV chart shows the clearest bottoms came when long-term holders were underwater on average.
The SOPR chart suggests the cohort is not yet broadly realizing losses.
The loss risk reads around 37%. It says the same thing in a different language.
So does history “support Bitcoin falling to $40k before a new bull run can begin” as a hard requirement?
I do not think the data earns that level of certainty. What the data does support is a more conditional version of the argument that is still powerful, and easier to defend.
If Bitcoin keeps dropping, and if the market needs a complete psychological reset, then a move toward the long-term holder cost basis zone becomes more plausible.
That is where long-term holders stop feeling safe, where MVRV compresses toward 1, where SOPR risks falling under 1, and where the loss share starts rising quickly.
If the market stabilizes above that zone and ETF flows begin to act as a steady bid, then the need for a deep washout diminishes.
The bottom can be built over time rather than through pain.
The ETF flow dashboards matter here because they show whether institutions are consistently absorbing supply or stepping away from it.
Macro still sits in the background like gravity.
The Federal Reserve held the target range at 3.50–3.75% in late January, and that keeps financial conditions relatively tight by recent standards.
The 10-year yield was around 4.26% at the end of January.
That is another way of saying cash has a decent alternative return right now, and that influences how much risk the market wants to carry.
Why the path matters as much as the level
Then you layer in positioning and market structure.
Glassnode’s Week On Chain notes that profit-taking pressure had eased into early 2026, and it also highlighted overhead supply levels that can make rallies feel heavy until they are absorbed.
It also pointed out that options open interest saw a major reset. That can change how violently the market moves when it reaches certain price zones, since dealer positioning and gamma can amplify momentum once a range breaks.
However, that relief did not last long as the start of February has seen heavy profit-taking with traders sending over $4 billion BTC to sell on Binance alone.
Today, Glassnode declared,
The BTC capitulation metric has printed its second-largest spike in two years, highlighting a sharp escalation in forced selling.
These stress events typically coincide with accelerated de-risking and elevated volatility as market participants reset positioning.
That matters because the road to $40,000 – $50,000 is not just a straight line down.
It is a sequence of failed rebounds, liquidity pockets, forced selling, and, eventually, indifference.
That is what bear markets do. They do not simply drop until the number looks low enough; they wear people down.
Long-term holders are usually the last group anyone expects to feel stressed.
The whole mythology of Bitcoin is built around conviction: holding through storms, buying dips, staying humble when it is euphoric, and staying patient when it is dark.
That myth is rooted in a real pattern.
The strongest cohort tends to capitulate late, and when it does, it often coincides with durable lows.
Historically, the moments when that cohort is underwater on average have lined up with major bottoms.
But we are not there yet.
The indicators that mark the harshest phase of that process, MVRV under 1, SOPR under 1, and a rising share of long-term supply held at a loss, are still ahead if the drawdown continues.
So yes, the charts support the broader idea that deeper pain is usually present near the cleanest bottoms.
They also add an essential element: a checklist that lets you track whether the market is actually reaching that phase or just talking about it.
If we’re looking for a durable low that can support a new cycle, then $40,000 – $50,000 is best treated as a neighborhood where the conversation gets serious.
That is roughly where long-term holders start meeting their own cost basis.
