Bitcoin’s Price Weakness Persists as Rising Values Spark Fresh Selling from Long-Term Holders
Bitcoin's price action is hitting a familiar wall. Every uptick seems to trigger a wave of profit-taking from the very investors who've held through the worst of it.
The Sell-on-Strength Reflex
It's a classic market dynamic, just dressed in digital leather. Prices climb, wallets unlock, and coins move to exchanges. This isn't panic selling—it's calculated exit strategy. Long-term holders, often hailed as the 'diamond hands' of the crypto world, are demonstrating they're not immune to the oldest rule in finance: buy low, sell high. Their collective action creates a persistent overhang of supply that caps rallies before they can gain serious momentum.
Navigating the Resistance Zone
The market now wrestles with a psychological barrier built by its most steadfast participants. Each attempt to push higher meets this automated response from seasoned players looking to realize gains. It turns every potential breakout into a grinding battle between new bullish momentum and entrenched profit-taking behavior. The pattern suggests a market still finding its post-rally footing, where confidence is measured in satoshis sold, not held.
So the digital gold narrative endures another stress test, proving that even in decentralized finance, human nature—and its relentless pursuit of a profitable exit—remains the most centralized feature of all.
Selling pressure deepens as liquidity thins
Market analyst Alex Kuptsikevich from FxPro said cryptocurrencies “have already entered a bear market,” and warned that any short-term recovery WOULD likely attract more selling.
He added that many investors are using brief price rallies to exit positions opened during the earlier bullish wave.
Bitcoin’s failure to bounce with other risk assets has further exposed weak liquidity and fading risk appetite. Analysts said its normal upside correlation with equities has broken down, showing how fragile the digital asset space has become.
Glassnode also noted that implied volatility, a gauge of expected price swings, has started to decline and usually continues to shrink after the year’s final major macro event, which in this case was the December 10 FOMC meeting.
The firm said that without any hawkish surprises from the Fed, gamma sellers are likely to return and speed up volatility decay through the rest of the year.
Gamma sellers, often market makers or institutional traders, make profits when the market stays calm but face steep losses when sharp price moves hit.
ETFs lose momentum as traders stay cautious
Mitch Galer, a trader at GSR, said the macro backdrop has become the key force driving crypto prices.He pointed to how trading flows have had an outsized effect recently, describing that as typical for a bearish setup.
Galer said uncertainty tied to a US government shutdown, reduced Fed data access, and geopolitical unpredictability have made investors cautious. While he expects volatility to stay high in the NEAR term, he also sees some potential for a rebound toward year-end since sentiment is already “heavily negative” and prices have stopped collapsing.
Timothy Misir, head of research at BRN, said the current stability is built on a “fragile foundation.” He cited thin liquidity and divided ETF flows, saying the crypto market is “searching for direction rather than committing to one.”
ETF flows, once a strong source of support, are now losing steam. BlackRock’s IBIT saw investors pull out around $2.3 billion last month, its largest monthly withdrawal so far and only the second of the year.
Though the outflows represent just 3% of IBIT’s total assets, they’ve sparked worries that long-term holders are starting to rethink their conviction.
Still, data from Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia shows that despite the steep price drop, total outflows from the twelve spot Bitcoin ETFs amount to less than 5% of their combined assets.
The analysts said bitcoin remains in a prolonged bull cycle, with institutional buying staying relatively steady and absorbing the ongoing wave of retail selling.
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