Bitcoin may be nearing a make-or-break point as short-term traders sit on harsh unrealized losses from the current bull cycle.
According to cryptocurrency analyst Dark Frost, short-term Bitcoin (BTC) traders who hold BTC between one and three months are sitting on losses of 20% to 25% over two weeks, marking the highest pain point of the current market cycle.
“Once a large portion of them are capable of that, as we’ve seen in recent weeks, that’s usually when the opportunity for accumulation gets interesting,” he wrote in a note on Monday.
Dark Frost added that this synergy will remain underwater as long as BTC trades above its realized value of around $113,692.
Despite the current correction, some of the largest financial institutions are optimistic about Bitcoin’s momentum in 2026.
On Monday, asset management major Grayscale said bitcoin’s current plunge points to a local bottom before a recovery in 2026. This is a development that, according to the company, will invalidate the four-year cycle theory.
Related: Cathy Wood Still Bullish on $1.5 Million Bitcoin Price Target: Finance Redefined
Bitcoin ETF just accounts for up to 3% of selling pressure: ETF Analysts
Despite previous concerns about massive selling by spot bitcoin exchange-traded fund (ETF) holders, these funds were only part of the selling pressure behind bitcoin’s price decline.
“I just read that Citi analysts say that for every $1 billion pulled from bitcoin ETFs, that equates to about a 3.4% drop in bitcoin’s price. Well, by that logic, since the ETF has increased inflows by 77% on Monday to +.522.5B on Monday,” Bloomberg ETFs added 77% this year.
“ETFs have been like 3% of the tops sold yesterday.”
Related: Bank of America Backs 1%-4% Crypto Allocation, Opens Door for Bitcoin ETFS
Meanwhile, Bitcoin ETFs have begun to recover from the $3.48 billion in gross outflows recorded during November, marking their second-worst month on record.
Bitcoin ETFs recorded $58 million worth of net positive inflows on Tuesday, marking their fifth straight day of positive inflows, according to data from Farside Investors.
Those modest inflows could continue as bitcoin ETFs trade for buyers on a flow-weighted basis of around $89,600, meaning the average holder is no longer sitting on paper losses.
Looking at other U.S. crypto funds, Spot Ether (ETH) ETFS saw outflows of $9.9 million on Tuesday, while Solana (Sol) ETFS recorded net negative outflows of $13.5 million, according to Farside Investors.
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