Bitcoin (BTC) has shed $40,000 from its peak at the start of October, and the story behind the drop is more interesting than you might think.

New analysis suggests the crash wasn't caused by overleveraged retail traders getting liquidated or some coordinated short attack. Instead, it was whales who bought around the $126,000 all-time high and then panic-sold all the way down to $84,000, taking massive losses along the way.

Late-Arriving Whales Capitulated Hard

Large holders who accumulated near the top were forced to realize substantial losses, creating the kind of sustained selling pressure that drove Bitcoin down 32% from its peak. This wasn't a quick flush—it was a methodical unwind by big players who got caught at the wrong time.

Data from CryptoQuant shows dramatic spikes in realized losses from new whale cohorts during the selloff. These addresses accumulated BTC during the rally, riding the momentum higher, then sold at steep losses when the market turned against them.

But here's where it gets interesting: since Bitcoin hit the recent low around $84,000, those realized losses have declined sharply and are now flat. The new whale cohort that caused the crash has stopped selling. They've either capitulated entirely or decided to hold what's left.

Long-Term Holders Didn't Flinch

Meanwhile, old whale cohorts maintained relatively stable behavior throughout the entire drawdown. Long-term holders largely sat through the decline, avoiding the panic that amplified the drop.

This distinction matters quite a bit. When only recent buyers are selling and long-term holders refuse to budge, it suggests the asset is finding a floor rather than cascading lower. It's a sign that the weak hands have been shaken out.

Market Expects Range-Bound Trading

Prediction market Polymarket shows Bitcoin has only an 18% chance to reach $95,000 by the end of 2025. Tapping $100,000 is given just a 6% chance.

On the downside, $80,000 shows 15% odds as the bearish scenario. Notably, odds of Bitcoin closing above $130,000 or below $70,000 are both under 1%, reinforcing the range-bound outlook.

Traders are betting on consolidation, not fireworks. After a 32% drop driven by whale panic, that's probably the right call.