Bitcoin Under Pressure: 7.1 Million BTC in Loss as ETF Demand Cools, Echoes of 2022 Stress Emerge
Bitcoin's price action is flashing warning signs that feel eerily familiar. A significant chunk of the supply—7.1 million BTC, to be exact—is now held at a loss, a metric that historically signals intense market stress. Meanwhile, the once-fervent institutional demand via spot ETFs has noticeably cooled, removing a key pillar of recent support.
The Perfect Storm of Pressure
This combination creates a precarious setup. The sheer volume of coins underwater suggests a large pool of potential sellers waiting for any relief rally to exit. Without fresh ETF inflows to absorb that selling pressure, the market's foundation looks shaky. It's the classic crypto tug-of-war between weak hands and institutional conviction—and right now, the weak hands are gaining ground.
Institutions Hit the Pause Button
The slowdown in ETF activity isn't just a blip; it's a sentiment shift. After months of treating Bitcoin like a must-have tech stock, big money is suddenly checking the price tag and hesitating. This pivot exposes the asset's raw volatility, reminding everyone that for all its 'digital gold' branding, Bitcoin's price discovery still happens in a market that makes traditional finance look like a model of sober restraint.
History Doesn't Repeat, But It Often Rhymes
While no two market cycles are identical, the parallels to 2022's structural stress are too stark to ignore. Then, as now, mounting unrealized losses met with a liquidity crunch. The difference this time? The market is older, larger, and supposedly more mature—though you wouldn't know it from the price chart. The coming weeks will test whether the ecosystem has truly built stronger infrastructure or just a taller cliff to fall from.
Demand Weakens Across ETFs, Spot, and Futures
Despite the above similarities, capital momentum remains a bit positive. Net Change in Realized Cap is at +$8.69B per month. This remained well below the $64.3B high in July 2025 but remained positive to keep Bitcoin above the $90K level. Even the long-term holder community remains selling at a profit. Their long-term holder SOPR remained at 1.43 but showed significantly reduced margins.
Demand in the off-chain market was lower. US bitcoin ETF funds became negative on 3-day flows. Spot CVD decreased for the main exchanges since traders have reduced risk. Flows for Coinbase also became less. Data for futures also reflect a slow trend since open interest decreased while the funding rate was close to zero. Such reduced risks have lowered the possibilities of liquidity.
Options Market Resets Toward Neutrality
The options market adjusts to a less volatile environment. The implied volatility index reduced across all terms. IV for short-dated options decreased from 57% to 48%, medium-term IV decreased from 52% to 45%, and long-term IV decreased from 49% to 47%. Additionally, skew was reduced in the short-dated options from 18.6% to 8.4% after a rebound from the $84.5K level.
Flow data reveals a flipping of sentiment through the week. Heavy put buying early on was driven by fear, but as the price stabilized, traders went back to calls. At the $100K level, it remains a difficult zone, lower where more call premium continues to be sold than bought as participants pay up for risk protection.
Meanwhile, implied volatility has fallen below realized, implying that actual moves have been larger than anticipated. This is long-gamma theater as the market nears Dec 26th expiration and a reset into 2026.
