Bitcoin hovers under pressure: Why might a volatile market be approaching?

Bitcoin (BTC) current price is $90.64K, 24-hour change -0.23%, market sentiment is polarized (53.64% bullish, 46.36% bearish), reflecting deep internal market conflict. This is not just a price stagnation issue but a sign of structural pressure gradually accumulating.

Price Stagnation and Crumbling Confidence

BTC is currently trapped in a fragile price range, with the upper bound stuck at the short-term holder cost basis (around $102,700), and the lower support at the actual market value ($81,300). On the surface, the price can still stay above the actual market value, but the underlying signals are far from reassuring:

Unrealized losses continue to rise. The 30-day simple moving average of unrealized losses has risen to 4.4%, reaching a two-year high. From the frenzy to now, the market is experiencing a shift from confidence to increasing pressure.

Realized losses surge. During the rebound from the November 22 low to about $92,700, the 30-day moving average of realized losses has risen to $555 million/day— the highest level since the FTX collapse. This indicates that high-position investors are gradually recognizing losses and exiting, rather than waiting for a rebound.

Long-term holders are reducing positions. Investors holding for over a year are realizing gains of up to $1,300 million/day during recent rebounds, a historical high. This suggests experienced funds are actively taking profits, coinciding with new entrants cutting losses—both sides are selling.

Demand Resists, but Durability Unknown

Despite this selling pressure, BTC price remains above market value, indicating a silent buy-side absorbing supply. But can this demand persist? The key is whether the short-term holder cost basis (around $95,000) can be reclaimed.

If selling pressure weakens, this suppressed buying power could trigger a new rebound, testing the 0.75 quantile of $95,000, or even pushing toward the short-term holder cost basis. But only if time stops being an adversary—this “enemy” is gradually eroding participant confidence.

Market Calm in Spot and ETF Retreat

US spot ETFs have experienced negative net inflows for the second consecutive week, continuing a cooling trend since late November. This contrasts sharply with the hot influx of funds earlier in the year, with institutional allocators shifting from aggressive to defensive.

Spot trading volume remains near the 30-day lower bound. From November to December, trading volume has been shrinking, reflecting declining market participation. This means the price’s resilience against macro shocks and volatility is significantly weakened—lacking sufficient liquidity to absorb unexpected swings.

Derivatives Market Signals: No Optimistic Leverage

Futures markets are also lackluster. Open interest has not seen significant rebuilding, and funding rates remain near neutral. This indicates traders’ interest in leveraged longs is limited, with little speculative directional pressure.

Options market’s defensive stance is more evident. Implied volatility (IV) has suddenly risen about 10 points on the short end, while the long end remains stable. The 25-Delta skew has risen to 11% (one cycle out), showing increased demand for downside protection ahead of the FOMC meeting.

This is not speculators betting on a one-sided decline but a widespread hedging demand—traders are buying volatility on both ends, preparing for potential large swings. This “double-sided volatility buying” pattern suggests the market is accumulating convexity ahead of risk events, with a clear defensive intent.

Time Pressure and Psychological Wear

The market has lingered in this fragile price range for a long time. Over time, the psychological pressure from unrealized losses will gradually translate into action—this explains the high realized losses we see. Participants are gradually surrendering in this prolonged battle, not because prices have defeated them, but because time erodes confidence.

FOMC meeting (December 10) will be the last major catalyst during this period. Historically, implied volatility tends to start gradually declining after such a significant event. Unless there are hawkish surprises or major policy shifts, the market will likely enter a low-liquidity, mean-reversion phase by the end of December—usually meaning more sideways movement and erosion for BTC.

Short-term and Long-term Divergence

Short-term outlook (within one month) depends on two key conditions:

1. Whether selling pressure truly fatigues—if so, $95,000 will be tested again
2. Whether liquidity improves—if not, volatility may increase

Long-term outlook depends on whether the market can break through the key cost basis level and rebuild confidence. Currently, the price has not fallen below the market value ($81,300), but this may only be a matter of time unless new capital influx breaks the deadlock.

Summary: A Fragile but Stable Balance

Bitcoin is currently in a structurally fragile but temporarily stable state. High realized losses, long-term holder reductions, ETF inflow exhaustion, and subdued futures participation all point to broad selling pressure. Meanwhile, a silent but firm demand is maintaining the price, forming a temporary equilibrium.

This balance is highly susceptible to disruption. Whether through improved liquidity or retreating sell-side pressure, it could trigger sharp short-term volatility and trend reversals. Leading up to the FOMC, the market is accumulating convexity for potential large swings—investors should be prepared for rapid changes in either direction.

The question is no longer “Will Bitcoin go up?” but “How long will the silence last before pressure is released?”