The crypto market has experienced a severe drawdown in 2026, with Bitcoin, Ethereum, and XRP suffering heavy losses. According to Glassnode, over 8 million BTC are now underwater—held at a loss—highlighting the scale of the market reset. Ethereum's supply at more than 3x profit has dropped to 11%, the lowest since February 2017, indicating a fundamental compression in profitability compared to prior cycles. XRP's realized profit-to-loss ratio (90D-SMA) has fallen to 0.38, meaning for every dollar of loss, only 38 cents of profit is taken, a hallmark of intense capitulation. Network fees on XRP have also collapsed 91.5% from peak levels, signaling a contraction in organic demand. Experts suggest that during these periods, future winners separate from the field. Bitget CEO Gracy Chen notes that long-term participants can use this time to reassess conviction and portfolio positioning. Matthew Pinnock of Altura DeFi points to a shift from narrative-driven tokens to cash-flow-generating protocols, citing Hyperliquid's success as evidence. Despite the bearish sentiment, with Myriad users giving Bitcoin's retest of $55,000 a 75% chance, many believe the bottom is not yet in, viewing the correction as a repricing of risk rather than a collapse in adoption.

Key facts

• Over 8 million BTC are currently underwater, the highest since March 2020.
• Ethereum's supply at >3x profit drops to 11%, lowest since February 2017.
• XRP realized profit/loss ratio falls to 0.38, indicating extreme capitulation.
• XRP network fees decline 91.5% from peak, signaling demand contraction.
• Experts say this bear market separates future winners from the rest.

KeyAudit data perspective