Glassnode Reveals Panic. The psychological line at $90,000 per Bitcoin was never just a number on a chart. It symbolized confidence, a milestone that seemed to confirm that the world’s largest cryptocurrency had firmly entered a new era. When Bitcoin slipped below that level, it did more than trigger stop-loss orders—it shattered nerves.
In the hours surrounding the breakdown, major outlets reported Bitcoin trading in the high $80,000s, erasing a significant chunk of 2025’s gains and extending a drawdown of nearly 30% from its October peak above $120,000. As global markets turned risk-off, crypto once again showed just how tightly it is tied to macro sentiment.
Glassnode Reveals Panic . Behind the candles and price ticks, however, the real story was unfolding on-chain. Analytics firm Glassnode began flagging an uptick in realized losses, panic selling, and capitulation-like behavior, especially among newer buyers who bought closer to the recent all-time highs. This is the moment when “paper hands fold” is no longer just a meme, but a data-backed reality.
In this deep dive, we’ll unpack how Glassnode’s on-chain data explains the latest plunge below $90K, why panic selling is clustering among specific holder groups, and what this could mean for Bitcoin’s long-term trend. We’ll also explore how experienced participants are reacting, where key support levels may lie, and how traders and investors might navigate the current storm without succumbing to fear.
Bitcoin’s Slide Below $90K: What Actually Happened?
Glassnode Reveals Panic . The move below $90,000 did not occur in a vacuum. It came after weeks of pressure from both macroeconomic factors and crypto-specific catalysts. Several narratives converged at once, creating the perfect environment for Bitcoin to lose a critical psychological and technical level.
A Risk-Off Macro Environment Hits Crypto Hard
Global markets have increasingly shifted to a risk-off stance. Strong U.S. economic data, stubborn inflation readings, and doubts about further interest rate cuts have pushed bond yields higher and weighed heavily on risk assets, including cryptocurrencies.
Glassnode Reveals Panic . As yields rise, the opportunity cost of holding volatility-heavy assets like Bitcoin increases. At the same time, uncertainties around trade policies, tariffs, and geopolitical tensions have caused investors to de-lever portfolios, pressuring everything from tech stocks to digital assets.
In this climate, Bitcoin’s prior run above $100K began to look stretched. When price broke below previously defended support zones near $95K–$98K, sentiment deteriorated rapidly, clearing the way for a test of $90K and ultimately a sharp move into the high-$80,000 region.
From Euphoria to Exhaustion: The Hangover After New Highs
The current drawdown follows a powerful rally where Bitcoin printed new all-time highs well above $100,000, with peaks north of $120,000 driven by optimism around a pro-crypto U.S. administration, robust ETF inflows, and speculative fervor in the broader crypto market.
After such parabolic moves, markets rarely glide gently into equilibrium. Instead, profit-taking by long-term holders, overleveraged traders, and latecomers chasing momentum tend to collide. Once the uptrend weakens and the first sharp pullbacks appear, these late buyers start questioning their conviction.
This is precisely where the notion of “paper hands” enters. Traders who were euphoric at $120K often struggle to hold through a 20%–30% correction, even though such drawdowns are historically common in Bitcoin bull cycles.
Derivatives, Liquidations, and a Cascade Lower
The breakdown below $90K also interacted with the derivatives market. As funding rates normalized and long perpetual futures grew crowded, downside volatility set off a chain reaction of liquidations. While open interest had not reached the frothiest levels seen in prior cycles, the unwinding of leveraged positions added selling pressure right at key support zones.
Glassnode Reveals Panic . Once spot prices pushed through $90K, algos and systematic traders accelerated the move. A textbook feedback loop emerged: falling price triggered liquidations and stop-losses, which in turn drove price even lower. This is where on-chain data becomes invaluable, because it shows who was actually selling into the weakness.
Glassnode’s On-Chain Alarm: Panic Selling in Real Time
While price charts tell you what happened, Glassnode’s on-chain metrics reveal who is reacting and how they are behaving. During the drop below $90K, several key indicators flashed classic panic selling signals.
Realized Losses Surge as Recent Buyers Capitulate
Glassnode tracks realized profits and losses by comparing the last moved price of coins to their cost basis. When coins are spent at a lower price than they were acquired, the network records a realized loss.
Glassnode Reveals Panic . Recent reports show realized losses spiking sharply during the latest downturn, especially from addresses that acquired Bitcoin near the recent highs. This mirrors earlier corrections, where investors who bought near the top were the first to hit the sell button when volatility returned.
Metrics like STH-SOPR (Short-Term Holder Spent Output Profit Ratio), which measures whether short-term holders are selling at a profit or loss, dipped below 1—an indication that these newer participants are locking in losses, not gains. Historically, extended periods with STH-SOPR below 1 have aligned with fear-driven capitulation events.
In plain language: a large share of coins bought at elevated prices is now being sold for less, often in hurried fashion. That’s classic panic selling behavior from paper hands.
Short-Term vs Long-Term Holders: A Tale of Two Mindsets
Glassnode’s data also distinguishes between short-term holders (STHs)—those who have held coins for less than about five months—and long-term holders (LTHs).S
During the drop below $100K and into the $90K region, analysts observed that:
In fact, Glassnode highlighted that the monthly average spending by long-term holders has risen substantially, reflecting steady profit-taking after the market punched into new highs.This looks more like mature investors trimming exposure than panicking.
This divergence between anxious STHs and measured LTHs is the on-chain embodiment of “paper hands vs diamond hands.” Short-term entrants, often driven by hype, are quick to fold when their entries go underwater. Long-term believers, who accumulated at far lower prices, have more room—and more emotional resilience—to manage volatility.
Sentiment Metrics Point to Extreme Fear
Glassnode Reveals Panic . It’s not just realized losses that tell the story. Sentiment tools like the Crypto Fear & Greed Index plunged into “extreme fear” territory around the latest leg down, printing levels in the mid-teens. Such readings historically coincide with periods when retail participants feel the pain most acutely.
On-chain measures like Network Value to Transactions (NVT) and miner revenue metrics such as the Puell Multiple have also indicated an overheated market cooling down, with profitability compressing and transactional activity failing to keep pace with earlier price levels.
When you combine heightened realized losses, extreme fear, and a rush for the exits among short-term holders, one conclusion becomes hard to avoid: paper hands are folding, and Glassnode’s data is catching it as it happens.
Paper Hands Fold, Diamond Hands Position: Behavior in a Bitcoin Shakeout
The phrase “paper hands fold” has become shorthand for investors who sell at the first sign of trouble. In the context of Bitcoin’s drop below $90K, it’s a surprisingly accurate description of what on-chain analytics show.
Why Newer Investors Panic So Quickly
From a behavioral finance perspective, recency bias and loss aversion are powerful forces.
Glassnode Reveals Panic . Many new investors entered the market after seeing headlines about Bitcoin breaking $100K and beyond, often influenced by social media hype, ETF narratives, and stories of life-changing gains. These buyers anchored their expectations to that recent price action. When spot price retreated 20%–30%, they interpreted the move not as a normal correction, but as a sign that the entire crypto bull market could be over.
Loss aversion means that the pain of losing money looms larger than the joy of winning the same amount. So, even if a long-term chart suggests that volatility is par for the course, emotions shout louder than logic. The result: panic selling near local lows, even when on-chain data suggests the network remains structurally healthy.
How Long-Term Holders Read the Same Chart Differently
Long-term Bitcoin holders view the same price action through a different lens. Many of them accumulated coins at far lower levels—$20K, $40K, $60K—and have experienced multiple historic drawdowns.
Glassnode Reveals Panic . To them, a retrace from $120K to the high-$80Ks is painful but not unprecedented. Glassnode’s analysis of long-term holder spending shows that while profit-taking has risen, it is relatively orderly and consistent with past cycle peaks, not a wholesale exit.
These “diamond hands” often treat panic selling events as opportunities. With on-chain metrics revealing elevated realized losses and short-term capitulation, they may see improving long-term risk-reward as price approaches historically important support zones.
Key Bitcoin Support Levels After the $90K Breakdown
Price is ultimately where buyers and sellers agree, and technical levels still matter in a fundamentally driven market. Once Bitcoin convincingly dropped below $90K, traders started watching specific zones highlighted by both chart analysis and on-chain cost basis data.
The High-$80K to Mid-$80K Band
In the immediate aftermath of the breakdown, Bitcoin traded in the mid-$80,000s to high-$80,000s, with some exchanges printing lows near $85K–$88K before a modest rebound. This region coincides with earlier consolidation during the run-up to $100K, making it a natural area for some buyers to step in.
On-chain, there is evidence of a cost-basis cluster, where a significant amount of coins changed hands in prior months. When price revisits such clusters, they can act as temporary floors, as previous buyers defend their entries or average down.
Deeper Supports: $80K and the $70K–$75K Zone
Glassnode Reveals Panic . If sentiment remains fragile and macro headwinds persist, analysts have warned that Bitcoin could probe deeper supports:
Glassnode and other analysts have cautioned that extended panic selling from recent buyers could, in extreme cases, push price into the low-$70Ks. However, such a move would still be consistent with historical Bitcoin bull markets, which have often seen 30%–40% pullbacks even while preserving macro higher-highs and higher-lows.
Navigating the Volatility: Risk Management Over Emotion
Whether you’re a trader or long-term investor, a Bitcoin crash below $90K is a stress test for your risk management. Glassnode’s insights can inform strategy, but they cannot replace a sound plan.
Separate Time Horizons and Strategies
One of the main mistakes paper hands make is mixing time horizons. Someone who bought Bitcoin “for the long term” but constantly watches minute-by-minute charts will inevitably overreact to short-term volatility.
Position Sizing and Diversification
No matter how bullish you are on BTC, concentration without risk controls can push you into panic selling when markets move quickly against you. Thoughtful position sizing and diversification across asset classes can reduce the psychological pressure when the market turns.
That doesn’t mean diluting every bullish thesis; instead, it means ensuring that a single sharp drawdown—like a drop from $120K to below $90K—does not threaten your overall financial stability. When you’re not overexposed, you’re less likely to become paper hands at the worst possible time.
Focus on Data, Not Hype
Glassnode Reveals Panic . One of the biggest advantages of the modern crypto market is the availability of transparent on-chain data from platforms like Glassnode. Rather than reacting to social media panic or sensational headlines, market participants can monitor:
If the data shows widespread panic from new entrants but relatively calm behavior from seasoned holders, that context can drastically change how you interpret a price drop. You may still decide to reduce risk—but it will be a considered decision, not a fear-driven reflex.
(Nothing in this article is financial advice; always do your own research and consider speaking with a qualified professional before making investment decisions.)
Conclusion
Glassnode Reveals Panic . The headline “Paper Hands Fold: Glassnode Reveals Panic Selling as Bitcoin Drops Below $90K” captures the drama of the moment—but it’s not the whole story.
Yes, Bitcoin’s fall below $90,000 has shaken markets and triggered waves of panic selling, especially among newer, short-term holders who bought close to the top. Glassnode’s on-chain data confirms elevated realized losses, heightened fear, and a surge in capitulatory behavior.
Yet beneath the noise, long-term holders appear to be behaving in ways consistent with prior bull markets—gradually realizing profits, not stampeding for the exits. Structural indicators still suggest a network in a late-cycle shakeout rather than a collapse in fundamentals.
Ultimately, this episode is a reminder that Bitcoin’s upside potential comes with a toll: volatility. Those who approach it with clear strategies, realistic expectations, and a willingness to study on-chain signals rather than headlines are less likely to be counted among the paper hands when the next wave of volatility hits.
FAQs
Q. What does “paper hands fold” mean in the context of Bitcoin?
“Paper hands” is slang for investors who sell their positions at the first sign of volatility or loss. When Bitcoin dropped below $90K, many newer investors with weak conviction sold at a loss, effectively “folding” under pressure. Glassnode’s realized loss and short-term holder metrics show exactly this behavior—coins bought near recent highs being sold for less during the drawdown.
Q. How does Glassnode detect panic selling?
Glassnode analyzes the blockchain to track when coins move and at what price they were originally acquired. When coins are spent at lower prices than their purchase cost, the network records realized losses. A spike in realized losses, especially from short-term holders, combined with indicators like STH-SOPR dropping below 1 and extreme sentiment readings, signals panic selling and capitulation events.
Q. Is Bitcoin dropping below $90K a sign that the bull market is over?
A drop below $90,000 is certainly a serious correction, but it doesn’t automatically mean the bull market is finished. Historically, Bitcoin bull cycles have included multiple 20%–40% pullbacks before eventually resuming higher. Current data show long-term holders are taking profits but not exiting in panic, while key support zones remain below current levels. Whether the bull market continues will depend on macro conditions, demand returning at lower prices, and the market’s ability to reclaim major resistance levels.
Q. What key levels should traders watch after Bitcoin falls below $90K?
After the breakdown, traders are watching the high-$80K region as immediate support, followed by the $80K level and the broader $70K–$75K zone as deeper support areas. These zones line up with prior consolidation, cost-basis clusters, and technical support levels highlighted by multiple analyses. A decisive reclaim of $90K–$98K would help restore confidence, while sustained trading below $80K could signal a more prolonged corrective phase.
Q. How can investors avoid becoming “paper hands” during crashes?
Avoiding paper hands behavior starts with preparation. Investors can:
Set clear time horizons so they don’t mix short-term noise with long-term strategies.
Size positions conservatively so that volatility doesn’t threaten their financial stability.
Use on-chain data and objective metrics, such as realized profits/losses and holder behavior, instead of reacting purely to social media or headlines.
Most importantly, they should only invest capital they can afford to see fluctuate significantly. When volatility is expected rather than shocking, it becomes easier to stick to a plan instead of capitulating at the worst moment.
