Bitcoin Faces Heavy Selling Pressure as Loss-Holders Cap Rally Attempts

Bitcoin's near-term upside remains constrained by persistent selling from investors sitting on losses, creating a fragile trading environment as markets enter a typically low-liquidity holiday period.

The cryptocurrency opened Wednesday trading around $86,300 before rallying nearly 4.6% to breach $90,200, only to surrender the entire gain within minutes—dashing hopes for a year-end “Santa rally.” Bitcoin was last seen trading near $86,600, largely flat on the day.

Holiday periods often see reduced market depth, amplifying price volatility and sharp reversals. The latest bounce was primarily fueled by derivatives traders, as indicated by rising open interest and positive perpetual futures flows. However, the subsequent sell-off was driven mainly by spot market selling, underscoring a lack of sustained organic demand.

According to analytics firm Glassnode, the sharp rejection reflects “the dense supply accumulated between $93,000 and $120,000” — a range where many current holders bought in and may now be looking to exit at breakeven or a reduced loss. The report notes that any meaningful rally will likely “remain constrained” unless Bitcoin reclaims the $95,000 level and the short-term holder breakeven point near $101,500.

So far, the market has found support around the true mean investor cost basis of $81,500, which represents the average acquisition price of actively held Bitcoin. This level has helped prevent a steeper decline, but analysts question how long it can hold amid ongoing distribution from underwater holders.

“It’s unlikely we’ll see a significant ‘rocket jump’ for Bitcoin before the end of 2025, given the current bearish sentiment,” said Ryan Yoon, senior analyst at Seoul-based Tiger Research. “However, if the upcoming CPI data is favorable, we could see a short-term relief rally as the market reacts to potential easing of inflationary pressures.”

With liquidity thinning into year-end, Bitcoin remains caught between defensive derivatives positioning and steady selling from loss-sensitive holders, setting the stage for continued choppy price action in the weeks ahead.