Bitcoin (BTC) is struggling on Friday, December 5, with the sell-offs triggering the biggest spike in realized losses since the FTX exchange collapse in 2022.

Short-term holders bore the brunt of the market downturn, while their long-term peers remain largely unaffected, having accumulated their holdings at much lower prices, Glassnode figures reviewed by Finbold show.

Bitcoin realized losses hit highest since FTX collapse

As mentioned, the last time Bitcoin saw realized losses of this magnitude was three years ago, during the dramatic implosion of FTX exchange. One of the most dramatic moments in crypto history, the event led to more than $100 billion getting wiped from global crypto market capitalization within a day.

The sell-off intensified after it was revealed that Alameda Research’s balance sheet was heavily backed by FTX’s own token (FTT), which exposed deep structural risks within Sam Bankman-Fried’s crypto empire. Binance’s subsequent decision to liquidate $500 million in FTT then sent the token down 80% in a day, causing it to lose roughly $2.5 billion in value.

Weak macro data and inflation fears drive sell-off

At the same time, macroeconomic uncertainty is weighing the asset down even further. That is, while oversold conditions mentioned above could spark a short-term bounce, the trajectory still appears bearish, as weak U.S. labor data, including weekly jobless claims at three-year lows, keep pressuring risk assets.

Bitcoin’s 30-day correlation with the Nasdaq now stands at 0.82, showing how vulnerable it has become to broader market sentiment. Moreover, traders are now eyeing today’s Core Personal Consumption Expenditure (PCE) inflation data, which is expected to be of crucial importance given that unfavorable results could potentially delay Fed cuts and thus extend the cryptocurrency’s slide.

At press time, Bitcoin was trading at $90,750, down 2.19% on the daily chart.

Bitcoin ETF flows dwindle

U.S spot Bitcoin ETF inflows are also slowing down, recording $196 million in daily net outflows on December 5, marking the third consecutive day of withdrawals and the highest loss in two weeks. 

BlackRock’s IBIT fund lost $114.7 million, leading the sell-off, followed by Fidelity’s FBTC with $54.2 million and VanEck, which shed $14.30 million.

Weekly outflows are now $73 million in the red, according to the HeyApollo ETF tracker, while the monthly figure is much more grim, as Bitcoin ETFs have lost a total $2.833 billion over the past 30 days.

Featured image via Shutterstock