Bitcoin Exhausts Sellers as Structural Support Builds

Concerns are growing about the Federal Reserve’s independence, as the risk increases that monetary policy decisions may shift from being driven by macroeconomic data to presidential pressure.

That represents a significant structural risk for investors, as the central bank's autonomy remains key for global financial stability. 

At the same time, US President Donald Trump has reiterated tariff threats, extending pressure beyond direct trade partners. His warning toward any country engaging in commercial trade with Iran indirectly targets China - Iran’s top trade partner and the dominant buyer of its oil – and reintroduces geopolitical risk as crypto markets are slowly rebuilding. 

Despite this backdrop, Bitcoin is up 2.12% since the beginning of the week, outperforming traditional risk assets including gold, the Nasdaq, and the S&P 500 – a sign of cross-asset resilience to hostile macro headlines.  

Max pain likely over

Onchain data increasingly suggests that the most acute phase of stress is likely behind us. 

Short-term holders, by definition, are the cohort most sensitive to price action. They tend to enter the market during periods of momentum, carry higher cost bases, and react quickly when price reverses. 

As a result, their realised profit and loss behavior has historically served as one of the most reliable proxies for market sentiment, panic, and capitulation. 

Across prior cycles, the largest spikes in realised losses among short-term holders have consistently aligned with moments of forced selling exhaustion and market bottoms. These events reflect not just losses, but the point at which marginal, momentum-driven participants are flushed out of the market. 

On 19 May 2021, short-term holders realised $4.47bn in losses, marking the local bottom roughly one month after Bitcoin first reached $65,000. That capitulation preceded a final leg lower toward the $30,000 area before the price stabilised and eventually rallied to a new ATH in November 2021. 

Similarly, on 14 June 2022, realised losses surged to $3.26bn, representing the final capitulation of the 2022 bear market, as BTC slipped below $20,000 after peaking near $69,000 late the prior year. 

The November sell-off sits squarely within the historical magnitude associated with late-stage sell-offs, where emotional, price-reactive supply is absorbed and longer-term participants begin to reassert control. 

On 21 November 2025, short-term holders' realised losses reached $3.77bn. Historically, these zones have aligned with high-quality accumulation regimes. 

(Source: Bitcoin Research Lab)

But this time, the sell-off was largely driven by ETF outflows – a brand-new liquidity vehicle, particularly throughout November. 

A significant share of those flows likely originated from late-cycle participants who entered during the upside expansion and rushed to exit once the price fell below the short-term holder cost basis, mechanically amplifying realised losses across this cohort. 

(Source: Bitcoin Research Lab, CoinMetrics)

ETFs remain a powerful weighting and reflexive vehicle. When momentum is positive, inflows reinforce upside and compress volatility. When sentiment turns, however, that same mechanism works in reverse. 

After a handful of constructive sessions to start the year, narrowing the gap between cost basis and price, renewed outflows last week have once again pushed against price, keeping Bitcoin capped below the $95,000 level - a zone the market has struggled to reclaim since the November drawdown. 

Who is buying the dip?

The most aggressive buyers have been wallets holding between 100 and 10,000 BTC, which accumulated 57,330 BTC over the past two weeks, equivalent to roughly $5.3bn at current prices. 

This cohort typically represents high-conviction capital - large private holders, proprietary desks, and long-term allocators - and their sustained accumulation during periods of price compression signals growing confidence at current levels rather than reactive positioning. 

(Source: CoinMetrics)

In contrast, holders in the 10k to 100k BTC range have been net sellers on a one-month basis, reducing exposure by 15,356 BTC (~$1.4bn). This group overlaps heavily with lower-tier ETFs, hedge funds, and asset managers, which tend to operate with tighter risk constraints and higher sensitivity to drawdowns.  

Importantly, selling pressure from this cohort has already begun to fade. On a weekly basis, they have reversed course and added approximately 12,596 BTC (~$1.2bn), suggesting that distribution is giving way to stabilisation and early re-accumulation. 

At the top end of the spectrum, mega whales added 18,419 BTC over the past 30 days, representing roughly $1.7bn in net inflows. This cohort includes prominent market participants such as Strategy, which resumed significant BTC purchases in December, alongside the largest spot ETFs, including IBIT and FBTC, as well as major centralised exchanges. 

Accumulation at this scale reinforces the notion that supply is being increasingly absorbed by entities with longer investment horizons and balance-sheet-driven strategies. 

Bitcoin cost basis clusters 

The UTXO Realised Price Distribution (URPD) highlights an exceptionally dense concentration of supply clustered above the $84,000 level. 

Large volumes of BTC were acquired across closely packed cost bases, and by aggregating a few of them, three dominant cost-basis clusters are forming the most significant cost-basis cluster of the current cycle. 

The primary cluster sits between $84,000 and $85,000, where roughly ~1.0mn BTC were acquired. This is the single largest and most critical cost-basis zone, representing the first major line of defense if price revisits this area. 

Above that, a secondary cluster spans roughly $87,000 to $88,500, containing ~770,000 BTC. This range reflects heavy accumulation during the early phase of the post-ATH consolidation and acts as an important intermediate pivot zone for price acceptance. 

Finally, a broad upper cluster between $90,000 and $93,000 accounts for roughly ~1.45mn BTC. This is where a large share of recent buyers are positioned, making it the most densely populated ownership band overhead and a key area for both resistance and supply absorption. 

Below the $84,000 level, cost-basis density drops off sharply. Historical ownership becomes thin, meaning that a sustained move below this zone would quickly place a large portion of the market into unrealised loss. 

Such a move would likely trigger a strong reflexive reaction, either through forced selling or aggressive defense from participants seeking to protect their cost basis. 

In contrast, as long as price remains within or above this clustered range, market structure remains supported by deep, overlapping ownership, increasing the probability of consolidation and defense rather than disorderly downside.