Will the mining ban in China change Bitcoin's trajectory in 2026? Understand this important divergence

What Divergence Means for the Bitcoin Market Now

The Bitcoin market is entering 2026 full of contradictions that could be crucial for its future price trajectory. What exactly does this divergence mean? It refers to a situation where different market segments send conflicting signals – on one side, selling pressure, and on the other, buying by large players.

Bitcoin (BTC) is currently trading at $90.78K with a 24-hour change of -0.32%, and investor sentiment remains decidedly mixed. The share of supply in profit has decreased from 98% before the September sell-off to around 63 today, indicating real stress among holders. The NUPL (Net Unrealized Profit/Loss) indicator is deepening into negative territory, suggesting a classic capitulation scenario.

However, this is where the mentioned divergence appears – the market is sending both bullish and bearish signals simultaneously, which could completely change the outlook for the coming months.

China Tightens the Screws: Mining Power Shutdowns Suppress Bitcoin

The main catalyst for Bitcoin’s current weakness is regulatory actions in China. Authorities have again tightened restrictions on cryptocurrency mining, and specific actions in the Xinjiang region have led to the shutdown of about 1.3 GW of computational power – equivalent to disconnecting 400,000 mining devices.

The consequences are immediate and measurable. Bitcoin’s hashrate has dropped from 1.12 billion TH/s to 1.07 billion TH/s in just seven days – a decline of about 8 percent. This temporarily weakens network security and increases vulnerability to potential attacks. Since China controls around 14 percent of the total network hash rate, such regional actions immediately escalate selling pressure across the market.

Miners Sell, Long-term Holders Retreat

On-chain data confirms this scenario. Asian exchanges show a consistent net selling advantage throughout Q4. The net position of miners has shifted into the red, suggesting that miners’ profit margins are increasingly squeezed – forcing them to sell to limit losses.

At the same time, long-term holders (LTH) are reducing their positions, and selling activity has increased over the past weeks. The movement mainly originates from Asia, where regulatory measures combined with macroeconomic pressures are forcing various groups into forced sales.

Institutions Are Not Withdrawing – Here Lies the Key to the Divergence

This is where the divergence takes on real significance. While Asian exchanges show dominant selling pressure, US spot Bitcoin ETFs have just experienced the largest inflow in over a month – $457 million was added in a single day.

This discrepancy is critical. It suggests that while smaller entities and forced sellers are exiting positions, large institutional players are still buying. The bullish sentiment among big players remains intact, indicating that the current correction should be viewed more as a healthy reset than a panic spiral driven by fear.

What Does All This Mean for 2026 Outlook?

Bitcoin’s prospects in 2026 will be shaped by this fundamental chapter: forced sales driven by Asian regulation and miner pressure versus the sustained absorption of institutional capital.

Forced sales (w unlike panic sales) may actually lay a better foundation for growth. When large institutions buy during regulatory pressure rather than panic, it creates a scenario where weakness is quickly absorbed. What does this divergence practically mean? That the battles for Bitcoin could become more planned and less chaotic than previous cycles.

The key will be monitoring whether ETF inflows continue and whether Asian selling pressure spreads or diminishes. If institutions keep buying during regular dips, this divergence could be a turning point for BTC in the second half of 2026.