Bitcoin’s Strategic Consolidation: Whales Rebalance Amid Late-Cycle Transition

As of December 18, 2025, Bitcoin is navigating a pivotal market phase characterized by strategic profit-taking from long-term holders, signaling a transition into a late-cycle environment rather than a bearish capitulation. The cryptocurrency recently experienced a price decline to approximately $97,500, a move that coincides with a significant acceleration in distribution from its most steadfast investors. Data indicates that daily outflows from these holders have doubled since July, reaching 26,000 BTC. This activity is exemplified by notable transactions, such as a $237 million transfer by a known whale, Owen Gunden, to the Kraken exchange. Market analysts interpret this movement as calculated profit-taking—a hallmark of mature bull market cycles—rather than distress or panic selling. Concurrently, U.S. spot Bitcoin ETFs have witnessed substantial capital rotation, recording $869 million in outflows, marking the second-largest withdrawal event in their history. On-chain analytics from firms like Glassnode suggest this pattern mirrors historical late-cycle behavior where early investors rebalance portfolios, often paving the way for a healthier market foundation. For professional investors, this phase represents a critical inflection point. The redistribution of coins from long-term hands to new entrants can alleviate overhanging supply pressure and facilitate a more sustainable price discovery process once the distribution subsides. The current consolidation around the $97,500 level, therefore, is not viewed as a breakdown but as a necessary recalibration within a broader bullish structure. The underlying narrative remains intact: institutional adoption via ETFs continues to evolve, and blockchain fundamentals stay robust. This period of whale-led profit-taking is a typical, albeit complex, stage in Bitcoin's market cycle, potentially setting the stage for the next leg of institutional-driven growth as the asset class further integrates into global finance.

Bitcoin Whales Take Profits as Market Enters Late-Cycle Phase

Bitcoin's price decline to $97,500 coincides with heightened distribution from long-term holders, with daily outflows doubling to 26,000 BTC since July. The movement follows a $237 million transfer by whale Owen Gunden to Kraken, emblematic of late-cycle profit-taking rather than panic selling.

U.S. spot ETFs recorded $869 million in outflows, the second-largest withdrawal on record. Glassnode's analysis suggests this mirrors historical patterns where early investors capitalize on gains during bull market maturation phases.

The cryptocurrency's 5% intraday drop below $100,000 reflects natural market dynamics rather than structural weakness. Similar distribution patterns preceded previous cycle peaks, with seasoned investors methodically rotating capital.

Bitcoin Drops Below $100K as Fed Rate Cut Expectations Cool

Bitcoin's price fell below $100,000 for the third time in November 2025, triggering over $1 billion in crypto market liquidations within 24 hours. The sell-off coincided with weakening expectations for a December Federal Reserve rate cut, now priced at just 52.1% probability.

Crypto-linked equities suffered disproportionately, with mining stocks like Bitdeer plunging 19% and Bitfarms down 13%. The market downturn erased $92 billion from total crypto capitalization, now standing at $3.29 trillion.

Liquidity constraints from the recent government shutdown's fiscal surplus exacerbated the decline, though analysts anticipate relief as monetary conditions normalize. Bitcoin's failure to hold $104,000 during Asian trading hours preceded the U.S. session sell-off, highlighting ongoing weakness in Western markets.

Bitfarms Stock Plummets 18% as Bitcoin Mining Shutdown Plan Unveiled

Bitfarms Ltd. (BITF) shares tumbled 18% to $2.60 after announcing a complete wind-down of Bitcoin mining operations. The Canadian miner plans to convert all facilities to AI and high-performance computing data centers by 2027, beginning with its Washington site in December 2026.

The strategic pivot comes amid dismal Q3 results—a $46 million net loss and $69 million revenue miss. CEO Ben Gagnon contends GPU-as-a-Service could outperform bitcoin mining revenues, citing better economics for US operators in AI versus mining's migration to low-cost jurisdictions like Africa and the Middle East.

Cash App Introduces 11 Major Updates Including Bitcoin Lightning Network and Stablecoin Support

Block, the company co-founded by Jack Dorsey, has rolled out 11 significant updates to its Cash App platform, marking a transformative shift in digital payments. The updates include enabling Bitcoin Lightning Network transactions and integrating stablecoin payments, reflecting Block's commitment to adapting to evolving user needs in earning, managing, and sharing money.

Users can now leverage the Bitcoin Lightning Network for payments without holding BTC, as the app automatically converts U.S. dollar balances via Lightning QR codes. This feature capitalizes on the network's low fees and rapid transfers. Meanwhile, Square merchants gain flexibility in cross-currency settlements, choosing between USD-to-BTC, BTC-to-USD, or same-currency transactions—further embedding bitcoin into Block's ecosystem.

The stablecoin integration positions Cash App as a bridge between traditional finance and crypto-native solutions. These enhancements, part of over 150 platform improvements, signal Block's aggressive push toward mainstream crypto adoption.

Bitcoin ETFs See Second-Worst Outflows Amid Market Turmoil

U.S. spot Bitcoin ETFs faced a brutal wave of redemptions on Thursday, with net outflows nearing $870 million—the second-largest withdrawal since their launch. The selloff coincided with a broader crypto market downturn, reflecting a sharp pivot toward risk aversion.

Grayscale’s Bitcoin Mini Trust bore the brunt, losing $318 million in a single session. BlackRock’s IBIT and Fidelity’s FBTC followed, shedding $256 million and $120 million, respectively. Ark/21Shares, Bitwise, VanEck, and others also reported outflows.

The exodus marks a stark reversal from February’s record $1.14 billion outflow. Analysts attribute the retreat to macro uncertainty, with Kronos Research’s Vincent Liu calling it a 'risk-off reset.' Institutions are trimming exposure as volatility spikes, though long-term demand for Bitcoin remains unshaken.

Presto Research’s Min Jung notes growing Fed policy jitters and economic softness as key drivers. The data underscores crypto’s sensitivity to shifting liquidity conditions—a trend likely to persist until macro winds stabilize.

Raoul Pal Forecasts Crypto Liquidity Surge Post-US Government Shutdown Resolution

The US government resumed operations on November 13, 2025, following President Trump's signing of a funding bill that ended a 43-day shutdown. Market strategist Raoul Pal anticipates a significant liquidity influx into crypto markets as Treasury spending accelerates.

Federal Reserve policymakers remain divided on December rate cuts, creating macroeconomic uncertainty. Despite the shutdown's conclusion, Bitcoin briefly dipped below $100,000 as bearish sentiment temporarily dominated crypto markets.

Regulatory agencies including the SEC and CFTC face substantial backlogs, with numerous ETF and IPO applications requiring review after six weeks of reduced staffing. Pal's analysis suggests dollar weakness may emerge in coming months as liquidity conditions improve.