Underwear exposed! On-chain data reveals the three major "meat grinders" supporting $BTC. Smart money has already quietly ambushed, but the real "bloodbath" may not be over yet.

Market structure has clearly deteriorated. $BTC price has not only broken below the key short-term support line at $94,500 but also fallen through the real market average of $80,200. This average excludes long-dormant tokens and represents the average cost of active circulating chips; its breach is highly significant. The current pattern resembles the phase at the start of 2022 when the market shifted from volatility to deep correction. The market remains in a fragile balance of weak demand and persistent selling pressure.

In the medium term, the price fluctuation range is narrowing. Resistance is clearly located near the real market average of $80,200, while a more solid support may be around the realized price zone of approximately $55,800, a level that has historically attracted long-term capital.

As the market structure resets, identifying potential stabilization points on the downside has become a focus. On-chain data shows several demand zones. The UTXO realized price distribution indicates significant accumulation activity among new investors in the $70,000 to $80,000 range, suggesting funds are willing to enter at these levels. Below that, a dense cost basis zone between $66,900 and $70,600 has formed, which historically often acts as short-term support.

Market pressure is directly reflected in realized loss metrics. The current 7-day average realized loss exceeds $1.26 billion daily, indicating panic selling has increased after breaching key support levels. Historical experience shows peaks in realized losses often occur during capitulation phases. For example, during the recent rebound from $72,000, daily losses briefly exceeded $2.4 billion, a level often associated with short-term turning points.

Comparing with past cycles, the relative unrealized loss indicator (unrealized loss as a percentage of total market cap) has risen above its long-term average (around 12%), but still remains below extreme bear market levels (usually over 30%, and during the 2018 and 2022 bottoms, even reaching 65%-75%). Reaching such extremes typically requires systemic risk events like the LUNA or FTX collapses.

Institutional capital flows have shifted markedly. As prices decline, demand from major institutional investors has weakened significantly. Spot ETF inflows have slowed, and corporate and government-related funds are also decreasing. This contrasts sharply with the steady inflows during the previous rally phase, confirming a lack of new capital entering at current levels.

Spot trading volume remains subdued, which is another core issue. Despite the price dropping from $98,000 to $72,000, the 30-day average trading volume has not effectively increased. This indicates a lack of sufficient buy-side support during the decline. True trend reversals are often accompanied by a significant surge in spot volume, but current volumes only show slight rebounds, suggesting market activity is mainly driven by deleveraging and risk aversion. Low liquidity makes the market highly sensitive to selling pressure.

The derivatives market has entered a forced deleveraging phase. Recently, there has been a large-scale liquidation of long positions, reaching the highest level since this decline began. This indicates that as prices fall, leveraged long positions are being forcibly closed, intensifying downward momentum. During November-December, liquidation activity was relatively moderate, showing leverage was gradually rebuilding. The recent surge marks the start of a forced deleveraging phase. Whether prices can stabilize depends on whether this process is sufficiently completed.

The options market reflects high uncertainty and defensive sentiment. When prices tested the previous high of $73,000 (now acting as support), implied volatility surged to around 70%, up about 20 volatility points from two weeks prior. Short-term implied volatility remains elevated compared to recent realized volatility, indicating investors are willing to pay a premium for short-term protection.

Volatility re-pricing shows a clear directional bias. The skew of put options relative to call options has widened again, indicating the market is more focused on downside risk than rebound opportunities. Even if prices stay above $73,000, options flows remain concentrated on protective positions, reinforcing a defensive market tone.

Notably, the 1-month volatility risk premium has turned negative for the first time since early December, currently around -5. Negative risk premium means implied volatility is below actual volatility, which benefits option sellers by increasing time decay profits. However, this also forces them to hedge more frequently, potentially adding short-term market pressure.

The $75,000 strike put options have become a focal point for repeated testing. Net buying premiums for these puts have increased significantly, progressing in three phases, each coinciding with price declines and lacking effective rebounds. In longer-dated options (over 3 months), the situation differs: selling premiums have begun to exceed buying premiums, indicating traders are willing to sell high-volatility contracts in the long term while still paying premiums for short-term protection.

In summary, $BTC has entered a defensive phase. While initial signs of accumulation appear in the $70,000-$80,000 range and a dense position zone forms between $66,900 and $70,600, ongoing loss-driven selling keeps sentiment cautious. The leverage reset in derivatives alone is insufficient to establish a solid bottom. The options market shows investors are preparing for continued volatility. The key to future movement remains in spot demand. Without increased spot participation and sustained capital inflows, any rebounds are likely to lack durability. Until fundamentals improve, risks remain skewed to the downside.

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