Bitcoin Market Stress Continues: Short-Term Holders Underwater as Bear Market Fears Grow

Illustrating Bitcoin's current market stress and short-term holders' underwater positions.

Bitcoin's Persistent Pressure: Why Short-Term Holders Hold the Key to the 2026 Outlook

📌 Event Background and Significance

As we navigate the mid-2025 crypto landscape, Bitcoin (BTC) finds itself in a precarious position. After managing to reclaim the $88,000 level, the flagship cryptocurrency continues to struggle persistently below the crucial $90,000 threshold. This isn't a new phenomenon; BTC has failed to sustain any meaningful breakout above this resistance zone since late 2024, signaling a profound lack of conviction in the market.

BTC Price Trend Last 7 Days

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🐻 The prevailing sentiment is a potent mix of fear and apathy, a state that often precedes significant market shifts. Indeed, a growing chorus of analysts is now openly forecasting a full-blown bear market to unfold in 2026. Their argument is compelling: the current market structure simply lacks the robust demand and sustained accumulation necessary to ignite a renewed bullish phase, leaving many investors questioning Bitcoin’s immediate trajectory.

Forecasting potential market paths and the growing fear of a bear market.

This cautious, almost bearish, outlook is heavily reinforced by incisive on-chain data. Leading analyst Axel Adler’s latest report shines a spotlight on a critical vulnerability: short-term holders (STHs) are firmly underwater. This means their average cost basis for BTC is currently above the market price, a classic indicator of market stress. The continuous downward trend of the STH Realized Price, a key metric, underscores a worrying lack of strong, price-sensitive demand entering the market.

The Anatomy of Short-Term Holder Stress

Adler’s detailed analysis of the Short-Term Holder (STH) Realized Price offers an invaluable lens through which to understand Bitcoin’s current predicament. This metric represents the average price at which coins held for less than 155 days were acquired. When the market price falls below this average cost basis, it signals that recent buyers are experiencing losses, leading to pressure.

According to Adler's framework, which overlays BTC market price with STH Realized Price, alongside stress indicators and weekly changes, Bitcoin has consistently traded below the STH Realized Price since October 17 of last year. This consistent positioning confirms that the "stress mode" for short-term holders remains acutely active. Further exacerbating this is the weekly change in STH Realized Price, which has remained in negative territory and recently touched local lows. This isn't just a technical detail; it directly implies that STHs are actively redistributing their coins at lower prices rather than accumulating at higher levels, a clear sign of weak incoming demand and persistent overhead pressure.

💱 While this environment reflects significant pressure from above, it's crucial to differentiate it from outright capitulation. Unlike the forced liquidations typically seen at market bottoms, the current scenario suggests a gradual erosion of confidence. Rallies are met with selling pressure, preventing any sustained upward momentum. Until short-term holders can regain profitability, broader market sentiment is likely to remain constrained, affecting everything from speculative altcoins to DeFi protocols.

📊 Market Impact Analysis

The enduring stress on short-term holders has tangible implications for the broader crypto market, influencing everything from price volatility to investor sentiment. In the short term, we've seen a clear inability for Bitcoin to sustain any significant upward movement, trapping it in a range-bound struggle. This lack of clear direction can lead to increased volatility as traders attempt to play both sides of the market, often resulting in whipsaws that catch many off guard.

Visualizing the widespread market indecision and weak upside momentum.

⚖️ Investor sentiment, already marked by fear and apathy, continues to deteriorate under these conditions. This is reflected in declining trading volumes across exchanges, suggesting reduced participation from retail investors and a cautious stance from institutions. Sectors like decentralized finance (DeFi) and non-fungible tokens (NFTs), which often thrive on bullish momentum and speculative capital, feel the ripple effects of Bitcoin's stagnation. While core infrastructure projects might continue building, speculative interest wanes, making new capital inflows harder to secure. The prevailing mood suggests that capital is either sidelined or flowing into less volatile assets, impacting the entire crypto ecosystem.

Looking at performance across various timeframes, the picture is mixed but predominantly negative. While Bitcoin has shown modest stabilization over very short horizons—up approximately 0.9% on the week and 2.3% on the month—the broader context paints a bleaker picture. The 90-day performance is deeply negative at −26.7%, indicating that the stress regime has dominated across all major timeframes for several months. Adler’s forecast model points to continued downside pressure, projecting an expected weekly decline of around 3% if current conditions persist. This metric is a stark reminder that despite minor bounces, the path of least resistance remains downwards.

Technical Levels and Resistance Ceilings

From a technical analysis perspective, the weekly Bitcoin chart illustrates a market caught in a tug-of-war between established structural support and persistent overhead resistance. BTC is currently trading near the $88,000–$89,000 zone, an area that has functioned as a critical pivot since late November last year. Despite repeatedly reclaiming this level, Bitcoin has consistently failed to sustain a breakout above $90,000, indicating deep-seated hesitation rather than renewed bullish conviction.

Trend indicators offer a dual narrative. Bitcoin impressively remains above its 200-week moving average (MA), which continues to slope upward and currently sits well below the price. This preserves the broader bullish market structure, suggesting that long-term accumulation is still intact. Similarly, the 100-week moving average is also rising and has provided dynamic support during recent pullbacks, reinforcing the notion that long-term buyers are actively defending key levels. However, the immediate challenge comes from the 50-week moving average, which has flattened out and now acts as critical immediate resistance, aligning precisely with the broader supply zone identified between $90,000 and $95,000.

Volume analysis further complicates the outlook. After a significant surge in trading activity during the sharp correction from last October's highs, recent weeks have seen a noticeable decline in volume. This reduced participation points to growing apathy and indecision among market participants. While low volume environments can often precede a decisive directional move, the current setup does not clearly favor an upside resolution. Technically, as long as Bitcoin holds above the rising 100-week moving average, significant downside risk appears structurally contained, suggesting a floor is being defended. Conversely, a failure to reclaim the 50-week average keeps the market vulnerable to extended consolidation or even a deeper corrective phase before any sustainable recovery can truly develop.

📌 Key Stakeholders’ Positions

Understanding the current market dynamics requires examining the perspectives and actions of the key participants affected by and contributing to Bitcoin's stress regime.

Analyzing on-chain data for insights into short-term holder behavior and market sentiment.

Short-Term Holders (STHs): These investors, holding Bitcoin for less than 155 days, are arguably the most influential "stakeholders" in the current narrative. Their collective position is firmly "underwater," meaning their average purchase price is higher than Bitcoin's current market value. Their behavior—evidenced by redistributing coins at lower prices—highlights a clear lack of conviction and an eagerness to exit positions, often at a loss. This consistent selling pressure from STHs creates a significant overhead supply, acting as a natural ceiling for any upward price movement.

🐻 Analysts (Axel Adler and peers): On-chain analysts like Axel Adler provide critical data-driven insights. Their position is one of caution and realism, emphasizing the quantitative evidence of market stress, weak demand, and a lack of the conditions typically found in a bullish reversal. Their vocal calls for a potential 2026 bear market reflect a data-informed, conservative stance, guiding investors to prepare for prolonged difficult conditions rather than expecting an immediate recovery. They advocate for observing key on-chain metrics like the STH Realized Price as primary indicators.

Long-Term Holders and the Broader Market: While not as immediately active in selling, the broader market, including long-term holders (LTHs) and institutions, exhibits a state of indecision and reduced participation. LTHs appear to be holding onto their assets, indicated by the strong support provided by the 200-week and 100-week moving averages. However, there's a noticeable absence of fresh, aggressive demand to counteract the STH selling. This passive stance contributes to the market's inability to break key resistance levels, maintaining the prolonged stress regime and reinforcing overall apathy.

🔮 Future Outlook

⚖️ The path forward for Bitcoin hinges critically on a shift in the dynamics currently observed in short-term holders. For a meaningful recovery, two conditions are paramount: first, the STH Realized Price needs to stabilize and then begin to trend higher, indicating that new demand is entering the market at increasing price levels. Second, Bitcoin's market price must demonstrably hold its current levels and ideally break above the $90,000 to $95,000 resistance zone, effectively re-establishing STH profitability.

🐻 However, the risks of continued downside pressure are substantial. If Bitcoin fails to reclaim the crucial 50-week moving average, which now acts as immediate resistance, the market remains highly vulnerable to extended consolidation within the current range or, more alarmingly, a deeper corrective phase. This scenario could align with the growing analyst consensus predicting a bear market in 2026, characterized by a protracted period of declining prices and investor fatigue.

💱 While the outlook appears challenging, there are subtle opportunities. The continuous decline in the STH Realized Price, paradoxically, lowers the "resistance ceiling" that Bitcoin needs to overcome to return to healthier conditions. This means that when demand eventually returns, the distance required to push STHs back into profitability might be shorter than if their cost basis had remained elevated. Investors should monitor for signs of a genuine demand resurgence, potentially driven by macro catalysts or significant institutional adoption, rather than simply hoping for a bounce from current levels. The key distinction to watch for is whether the market transitions from this gradual erosion of confidence to a more definitive capitulation event, which historically has marked true cycle bottoms.

Depicting the prolonged market stress regime and gradual confidence erosion.

📌 🔑 Key Takeaways

• Bitcoin is currently in a prolonged stress regime, struggling to break above $90,000 despite reclaiming $88,000.
• Short-term holders (STHs) are underwater, selling at lower prices and creating significant overhead pressure, reinforcing weak demand.
• Analysts are increasingly predicting a bear market for 2026, citing a lack of conditions for a renewed bullish phase.
• Key technical resistance at the 50-week moving average ($90k-$95k) is preventing upward momentum, despite long-term structural support from 200-week and 100-week MAs.
• A turnaround requires STH profitability to improve, signaling a genuine return of strong, price-sensitive demand.

🔮 Thoughts & Predictions

The current Bitcoin market isn't just treading water; it's undergoing a significant psychological test, particularly for newer entrants. The persistent "stress regime" highlighted by Axel Adler's data, with short-term holders consistently underwater, paints a clear picture: the market lacks fresh, aggressive capital willing to bid prices higher, turning every minor recovery into a selling opportunity. This isn't the dramatic capitulation of a bear market bottom, but rather a slow, confidence-eroding grind that can be far more frustrating for investors.

From my vantage point, the calls for a 2026 bear market aren't alarmist; they are a logical extension of these observed fundamentals. With Bitcoin struggling to convincingly reclaim the 50-week moving average and declining volumes, the path of least resistance for BTC in the medium term (next 3-6 months) is likely further consolidation, potentially testing deeper structural supports like the 100-week MA more aggressively. The fact that STH Realized Price is declining means the "resistance ceiling" for recovery is theoretically lower, but it simultaneously screams of chronic demand weakness.

My bold prediction: We will likely see Bitcoin range between $75,000 and $92,000 for the remainder of 2025, with a higher probability of testing the lower bound. A genuine breakout above $95,000, signaling a potential reversal of the STH stress, would require a significant external catalyst—perhaps a major regulatory positive or a substantial institutional capital inflow exceeding anything we've seen recently. Absent that, investors should brace for continued choppiness and prioritize capital preservation over aggressive speculation.

🎯 Investor Action Tips

• Monitor STH Realized Price: Track this metric closely. A sustained upward turn in STH Realized Price while BTC holds current levels would be a strong bullish signal.
• Re-evaluate Risk Exposure: Given the potential for extended consolidation or deeper corrections, consider reducing exposure to highly speculative assets and rebalancing towards more established, lower-volatility positions.
• Identify Key Support Levels: Pay close attention to the 100-week moving average as dynamic support and be prepared for potential tests of this level if the $88,000 range fails.
• Focus on Accumulation Zones: If the 2026 bear market predictions hold, prepare a strategy to accumulate Bitcoin at historically significant discount levels, rather than chasing minor rallies.

📘 Glossary for Serious Investors

📉 Short-Term Holders (STH): Individuals or entities holding a cryptocurrency asset for typically less than 155 days. Their cost basis and behavior are crucial indicators of market sentiment and immediate price pressure.

📊 STH Realized Price: An on-chain metric representing the average price at which short-term holders acquired their coins. When the market price is below the STH Realized Price, these holders are collectively at a loss.

📉 Capitulation: A market event where investors, exhausted by sustained losses, indiscriminately sell off their assets at any price, often marking the final bottom of a bear market cycle.

Stakeholder	Position/Key Detail
Short-Term Holders (STHs)	Underwater; actively selling/redistributing at lower prices; creating overhead resistance.
Axel Adler (Analyst)	💰 📉 Cautious outlook; highlights prolonged stress, weak demand; forecasts potential 2026 bear market.
💰 Broader Market/Long-Term Holders	Indecision and apathy; maintaining structural support but lacking aggressive buying to push prices higher.

🧭 Context of the Day

Bitcoin's current market stress, driven by underwater short-term holders, mandates investor vigilance and strategic positioning for potential extended consolidation or a 2026 bear market.

📈 BITCOIN Market Trend Last 7 Days

Date	Price (USD)	7D Change
12/26/2025	$87,229.78	+0.00%
12/27/2025	$87,305.96	+0.09%
12/28/2025	$87,807.00	+0.66%
12/29/2025	$87,822.91	+0.68%
12/30/2025	$87,156.56	-0.08%
12/31/2025	$88,414.63	+1.36%
1/1/2026	$87,722.87	+0.57%

Data provided by CoinGecko Integration.

💬 Investment Wisdom

"The biggest risk is not taking any risk... In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks."
— Mark Zuckerberg

Crypto Market Pulse

January 1, 2026, 01:41 UTC

Total Market Cap

$3.06 T ▼ -0.74% (24h)

Bitcoin Dominance (BTC)

57.35%

Ethereum Dominance (ETH)

11.76%

Total 24h Volume

$92.92 B

Data from CoinGecko

This post builds upon insights from the original news article. Original article.

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