Michaël van de Poppe Warns About Historic Liquidations in Bitcoin After Massive Panic

The renowned cryptocurrency analyst Michaël van de Poppe highlights a concerning phenomenon shaking the Bitcoin market. Earlier this month, BlockBeats’ data chain revealed alarming figures on realized losses, marking this event as one of the most significant in the history of the leading cryptocurrency. The current context evokes similar moments from past major crashes: the brutal contraction of 2018, the pandemic crash in 2020, and the on-chain collapse of the Luna-FTX ecosystem in 2022.

Capitulation Signals: When Investors Give Up

What sets this panic phase apart is the behavior of Bitcoin holders. Many are engaging in capitulation sales, liquidating positions with accumulated losses or transferring their assets while remaining in negative territory. This collective behavior pattern usually indicates two simultaneous dynamics: forced liquidations of leveraged positions and fear-driven selling.

Analysts like Michaël van de Poppe see these movements as a “weak hands cleanup,” a term describing the expulsion of retail investors and high-risk speculative positions from the market. Historically, these extreme peaks of realized losses tend to cluster near or right at market lows, acting as a sort of purge that paves the way for subsequent recovery.

The Sharpe Ratio as a Turning Point Indicator

A technical indicator that captures the severity of the event is the Sharpe Ratio, which measures risk-adjusted return. According to disseminated analyses, this indicator has fallen to its lowest level since the last recorded market bottom. This sharp decline signals a mass capitulation event, combining large realized losses with a market sentiment bordering on emotional freezing, where virtually no buyers have confidence.

Has Bitcoin Reached the Bottom?

However, Michaël van de Poppe’s assessment introduces an important nuance that differentiates this cycle from previous ones. Bitcoin has retreated approximately 50% from its all-time high, well below the typical 80% decline seen in prior cycles. This divergence suggests a particularly relevant scenario: the market may be approaching the bottom, where more patient investors could find buying opportunities. Volatility data and on-chain metrics support the thesis that selling pressure might be nearing its peak.