Bitcoin (BTC) tumbled below $77,000 on Monday after a fresh round of threats from US President Donald Trump toward Iran. The decline has triggered accelerating panic selling across the market as key profitability indicators fall beneath critical thresholds.
Emerging on-chain data suggests a rapid V-shaped recovery is increasingly unlikely.
Widening Panic Selling in Bitcoin
Bitcoin’s recent drop appears to be evolving into a broader market crisis rather than a routine short-term correction. On-chain metrics point to a cascading sell-off driven by leveraged liquidations and rising fear across the spot market. According to CryptoQuant data, long-term holders who accumulated Bitcoin six to twelve months ago are now under significant pressure, with their average realized entry price near $110,851.
Following the market decline, many of these investors moved into deep unrealized losses, prompting a surge in exchange inflows beginning May 14. The analytics platform reports the Spent Output Age Bands (SOAB) ratio for 6–12 month coins spiked to 10.54%, well above its typical level below 1%. Such a jump indicates large-scale capitulation from long-term holders. Historically, similar spikes have signaled investors locking in major losses and exiting positions, which amplifies selling pressure on the spot market.
Weakness quickly spread to short-term traders as well. Although most exchange inflows normally come from coins held for less than a day, profitability metrics reveal rising panic-driven selling. On May 16, the Short-Term Holder SOPR dropped to 0.994 while the adjusted SOPR fell to 0.996—both below the 1.0 threshold that typically separates profit-taking from loss realization.
Even on May 17, the STH-SOPR held near 0.999. CryptoQuant notes this confirms many short-term investors are selling at losses rather than booking gains. The firm cautioned that a swift V-shaped recovery is unlikely until the “toxic” supply is absorbed and market sentiment stabilizes.
Signals Point to a Deeper Correction
The mounting market stress has reinforced bearish expectations among several crypto analysts. Doctor Profit warned again that a significant correction could be looming. Another commentator, Mr. Wall Street, suggested Bitcoin may face a much deeper decline after its recent 10% pullback, arguing that bullish sentiment has faded and reiterating a view that the asset could fall toward the $45,000 area.
Overall, on-chain indicators and trader behavior show elevated selling pressure across both long-term and short-term holders. Until the wave of realized losses eases and exchange inflows subside, analysts say downside risks remain elevated and recovery may take time to materialize.