Bitcoin Indicator Falls Back To Post-Bear Market Levels: Investors Approach A Key Decision Point

Bitcoin is trading below the $90,000 level once again, as the market continues to drift through a phase defined by indecision, rising caution, and growing fear. After repeated failures to reclaim this psychological threshold, price action has started to reflect a lack of conviction on both sides, with buyers hesitating to step in aggressively and sellers pressing every rebound attempt. While the broader trend has not fully collapsed, the inability to hold key levels is increasing uncertainty around Bitcoin’s next major move.

Top analyst Darkfost argues that on-chain signals are starting to mirror conditions typically seen near the end of prolonged drawdowns. According to his analysis, Bitcoin’s unrealized profits and losses are sliding back toward levels that have historically appeared only at the exit of bear markets, when the market has already absorbed a deep reset in sentiment. This shift suggests that stress is building under the surface, even if price has not yet entered a full capitulation phase.

Since Bitcoin’s last all-time high, Darkfost notes that many late-arriving investors have moved into uncomfortable territory, facing mounting downside pressure as the market cools. As a result, unrealized profits are shrinking, unrealized losses are expanding, and the overall balance continues to deteriorate—an environment that often forces traders into a decisive choice between holding through volatility or exiting under stress.

Darkfost highlighted a chart based on an adjusted version of NUPL (Net Unrealized Profit/Loss), designed to capture investor stress more accurately during shifting market regimes. Instead of relying solely on the standard market cap, the model incorporates the realized capitalization of both Short-Term Holders (STHs) and Long-Term Holders (LTHs), then compares that blended realized foundation against Bitcoin’s traditional market cap.

The result is a clearer view of how much profit or loss sits “on paper” across the market, filtered through a more structural lens. To reduce noise and better define trend shifts, the metric is smoothed using an average, producing what Darkfost refers to as aNUPL.

The key takeaway is that Bitcoin is approaching levels that have historically forced investors into a binary decision. When unrealized profits compress and unrealized losses expand to these ranges, holders typically face two outcomes: hold and continue accumulating, or capitulate and lock in losses. That difference in behavior becomes critical because it shapes liquidity, sentiment, and the next directional trend.

If long-term participants absorb the pressure and keep holding, the market can stabilize and rotate back into recovery. But if selling accelerates from stressed cohorts, the decline can deepen into a broader bear phase. This is why tracking realized and unrealized profit dynamics remains essential, especially during periods of uncertainty.

Bitcoin is trading around $89,000 on the weekly chart after a steep selloff that pushed the price out of its prior distribution zone. The latest candle reflects heavy downside pressure, with BTC dropping roughly 4.8% on the week and struggling to stabilize near a key pivot that has repeatedly acted as support and resistance throughout the cycle.

After failing to hold above the psychological $90,000 threshold, the market is now trapped in a tight consolidation range, suggesting traders are waiting for confirmation before committing to a larger move.

From a trend standpoint, Bitcoin remains vulnerable as it trades below the blue moving average, which is now acting as overhead resistance near the low-$100K region. The rejection from that dynamic level aligns with the broader structure: BTC topped near the mid-$120K range, then entered a sharp corrective leg that reset momentum into early 2026. While the green moving average continues to slope upward and is approaching the current price zone, the market has not yet shown the strength needed to reclaim its former trend trajectory.

Importantly, the weekly structure is now compressing. If buyers can defend the $88K–$90K region and push BTC back above $92K–$95K, it would signal a recovery attempt toward the moving average band. However, a sustained failure here increases the risk of a deeper retracement toward the low-$80K zone, where prior demand previously emerged.

Featured image from ChatGPT, chart from TradingView.com