Bitcoin Dips Below $65,000 Amid Whale Selling and Loss Realization
By John Nada·Feb 23, 2026·6 min read
Bitcoin has dropped below $65,000 due to increased whale selling, indicating a fragile market environment as short-term investors lock in losses.
Bitcoin has plunged 5%, falling below $65,000 as large holders, or whales, dominate exchange inflows while short-term investors lock in losses. Recent trading data shows a significant shift in market dynamics, indicating a fragile base-building phase for the cryptocurrency.
As of February 23, 2026, Bitcoin's price dropped sharply to $64,700, reflecting a broader trend of declining confidence among investors. The recent downturn follows a flush from the $67,000 range over the weekend, highlighting the volatility inherent in the cryptocurrency market. This price action coincides with a downturn in U.S. stock index futures, particularly with the Nasdaq 100 experiencing a 0.9% decline, and precious metals like gold and silver seeing significant gains, with gold ahead 2% and silver up 5.6%. Such movements often indicate a flight to safety among investors, further complicating the outlook for Bitcoin.
According to on-chain data from Glassnode and CryptoQuant, recent buyers have been realizing substantial losses, with a smoothed 7-day measure of short-term holder profits and losses dropping to –$1.24 billion per day earlier this month. This figure has improved to about –$0.48 billion per day, suggesting that while panic selling has lessened, it has not completely halted. This decline in short-term holder profits indicates that newer investors, who typically buy at higher prices, are struggling to maintain positions as market sentiment shifts.
The data from Glassnode underscores the challenges faced by short-term investors in this market phase. The significant loss realization observed earlier in the month is a hallmark of market capitulation, where investors sell off positions to mitigate further losses. The current average loss of approximately –$0.48 billion per day suggests a market still grappling with instability, as participants navigate the complexities of the current trading environment.
Exchange flow metrics from CryptoQuant further illustrate these trends. The amount of Bitcoin being sent to exchanges surged during the early February drop toward $60,000, peaking at approximately 60,000 BTC per day. This figure has since cooled to about 23,000 BTC, indicating that immediate selling pressure has eased somewhat. However, the changing nature of who is doing the selling points to a shift in market dynamics. The “exchange whale ratio” has climbed to 0.64, the highest level since 2015, meaning nearly two-thirds of Bitcoin flowing onto exchanges comes from the 10 largest deposits each day. This concentration of selling activity among whales raises concerns about the sustainability of current price levels.
The average size of Bitcoin deposits has also risen, reflecting that larger players, rather than small retail traders, are currently driving exchange activity. This trend can have profound implications for market stability; when larger holders dominate the selling landscape, it can lead to significant price fluctuations that smaller investors may find challenging to navigate. In contrast, altcoins are experiencing broader distribution, with average daily exchange deposits increasing from around 40,000 in Q4 2025 to about 49,000 in 2026. Elevated deposit activity across alternative tokens often signals increased volatility and a weaker risk appetite in the market, suggesting that investors are hedging their bets across a wider array of assets.
The tightening liquidity conditions add another layer of complexity to the situation. Net USDT inflows to exchanges have dropped sharply from a high of $616 million in November to just $27 million, and even turned negative briefly in late January. This contraction suggests a decrease in marginal buying power, which typically expands during market rallies. As stablecoin inflows decrease, the ability of the market to absorb sell pressure diminishes, further complicating the potential for recovery in Bitcoin's price.
Taken together, the loss-realization data from Glassnode and the exchange metrics from CryptoQuant portray a market digesting a capitulation event but not yet rebuilding strong demand. Traders and investors are left with uncertainty as to whether the $65,000 level will hold as a near-term support or if Bitcoin will remain in a prolonged base-building phase. This critical juncture in price action could determine the trajectory of Bitcoin's performance in the coming weeks.
The implications of this volatility are significant for the broader financial system. Increased whale activity and the ongoing pressure on prices highlight the challenges facing smaller investors, who are currently locking in losses. This dynamic could deter new capital from entering the market, prolonging the current state of uncertainty and instability. The current scenario serves as a reminder of the intricate relationship between selling pressure from large holders and the market's ability to absorb that supply.
Stakeholders are closely monitoring the developments, as the ability of Bitcoin to stabilize and regain upward momentum could influence overall market sentiment and investment strategies in the crypto space. Analysts and traders alike are keenly aware of the historical significance of whale selling patterns and their impact on price movements. As this situation unfolds, market participants will need to remain vigilant about the potential for further downward pressure, especially if whale selling continues to dominate trading activity.
Moreover, the broader economic context adds another layer of complexity. The recent developments in U.S. trade policy, including President Trump's decision to raise the global tariff rate to 15%, have implications not just for traditional markets but for cryptocurrencies as well. The uncertainty surrounding trade tensions can weigh heavily on risk assets, including Bitcoin and other cryptocurrencies, as investors reassess their portfolios in light of evolving macroeconomic conditions. This backdrop of geopolitical tension further complicates the ability of Bitcoin to stabilize and attract new investment.
In the wake of these developments, market analysts are calling for a cautious approach. The current state of the market may resemble previous periods of consolidation, where prices oscillate within a defined range before either breaking out or breaking down. The key question remains whether the market can find sufficient buying interest to support the $65,000 level, or if the selling pressure from whales will continue to exert downward force on prices.
As the week progresses, traders will be keeping a close eye on various indicators, including trading volume, volatility, and overall market sentiment. The interplay between whale activity, short-term investor losses, and macroeconomic factors will dictate the next steps for Bitcoin and the broader cryptocurrency market. This ongoing analysis will be crucial for understanding potential price movements and investment opportunities in a market characterized by rapid change and uncertainty.
Ultimately, the current landscape presents both challenges and opportunities for market participants. The delicate balance between whale selling and potential recovery efforts will be a focal point for traders looking to navigate the complexities of the cryptocurrency market. Observing how these dynamics unfold will be essential for anyone invested in or considering entry into the crypto space, as the potential for significant price movements remains.