FTX Echoes: Bitcoin Short-Term Holders Capitulate at Historic Levels Amid Market Correction

Recent data from blockchain analytics firm Glassnode reveals a significant market development: Bitcoin's short-term holders are capitulating at a rate not seen since the catastrophic FTX collapse in late 2022. This analysis, dated December 6, 2025, indicates that the recent price correction below the critical $80,000 support level has triggered a massive wave of realized losses among investors who purchased BTC at higher valuations. While the scale of this capitulation mirrors the post-FTX period, analysts note a crucial distinction—the current sell-off is occurring without a comparable, systemic liquidity shock to the broader cryptocurrency ecosystem. This suggests the pressure is largely contained to market sentiment and recent buyer behavior rather than a fundamental crisis. The data underscores the psychological breaking point for newer market participants while highlighting the contrasting resilience of long-term holders, who have largely refrained from panic selling. This event provides a stark reminder of market cycles and the differing behaviors between short-term speculators and committed investors, drawing direct parallels to one of the industry's most traumatic events while offering a more nuanced view of the underlying market health.

Bitcoin Short-Term Holders Capitulate at Levels Seen During FTX Crash

Bitcoin's recent price correction has triggered the largest wave of short-term holder capitulation since the 2022 FTX collapse. Glassnode data reveals these investors—who purchased BTC at higher prices—are now realizing losses at a scale comparable to post-FTX market conditions, though without a comparable liquidity shock.

The $80,000 support level became a breaking point for recent buyers, while long-term holders remain largely unfazed. Their average cost basis sits at $54,622, a historical high that underscores their advantage during volatility. Market analysts note such capitulation events often precede local bottoms, with BTC already rebounding to $94,000 before retracing to $92,000.

Notably absent are distressed sales from major institutions—a key distinction from the FTX aftermath. The market now watches whether this flush-out of weak hands sets the stage for renewed upward momentum, following historical patterns where extreme realized losses marked turning points.

U.S. Prosecutors Seek 12-Year Sentence for TerraUSD Founder Over $40B Crypto Collapse

Federal prosecutors are pushing for a 12-year prison term for Do-hyung, co-founder of Terraform Labs, citing his role in a "colossal" fraud that triggered a chain reaction across crypto markets. The collapse of TerraUSD in 2022 wiped out $40 billion in value, contributing to the downfall of major platforms like FTX.

Do-hyung pleaded guilty to conspiracy and wire fraud in August, agreeing to forfeit $19.3 million and properties. His sentencing, scheduled for December 11 before Judge Paul Engelmayer in New York, could set a precedent for accountability in crypto-related fraud cases.

Prosecutors argue the scheme was deliberate, accusing Do-hyung of misleading investors and exacerbating systemic risks. The government has declined to pursue restitution, citing the impracticality of calculating losses for millions of affected users globally.