Bitcoin’s demand has improved, but the asset could remain choppy in the near term.
The long-term holders (LTH) have eased their sell-off after a persistent dump since July. These are investors who have held BTC for more than five months.
Similarly, the U.S. Spot BTC ETF pressure has also dropped, but the January outlook remains murky.
BTC demand shift
The LTH dump intensified to over 400K BTC on a monthly average in mid-December. But it has since tapered off and flipped positive.
According to a CryptoQuant analyst, DarkFost, that reset could trigger a firm bottom or a recovery.
“Historically, such shifts have often preceded the formation of consolidation phases or even bullish recoveries, depending on how the broader trend evolves.”
Notably, the U.S. Spot ETFs also became net sellers from November, further dragging the BTC price lower.
Interestingly, the institutional sell-off has also tapered off significantly, and a shift to positive could provide the needed lift above $85k.
However, the upcoming January updates may trigger volatility. And it could keep BTC subdued despite the improving demand front.
January risks
Already, BTC has been whipsawing below $90K as major players sell at a loss to offset their tax liabilities, noted Eric Balchunas, a Bloomberg ETF analyst.
“Bitcoin’s price chart looks a lot like ETF heartbeat trades (short term tax-motivated trades that have nothing to do with actual sentiment).”
Fast-forward to the 15th of January, the MSCI delisting decision of Strategy and other BTC treasury firms will be a key catalyst.
The market was pricing the possibility that Michael Saylor’s strategy could be removed from the global index.
Afterward, the Fed rate decision and government funding deadline on the 28th and 30th of January could set the pace for Q1 2026.
It would only be bullish if the MSCI allows Strategy on the index and the crypto bill successfully marks up and advances out of the Senate.
However, if the funding deadline evolves into another government shutdown, the crypto bill could face another delay and be caught up in the 2026 U.S. elections.
The Fed chair, Jerome Powell, is also expected to be replaced by a candidate who can serve as a proxy for the White House in managing the inflation rate and bond yields.
Collectively, these events will make January a volatile month.
Will Bitcoin hold $80K?
And how are big players positioning themselves? Well, there was increased hedging eyeing $80K-83K as demonstrated by put volumes (red bars). Some were even preparing for a downswing as low as $75K.
On the upside, the bets were at $88K and $94K, further projecting a likely muted price action below $95K in the mid-term.
Final Thoughts
- LTH and ETF sell-off have eased significantly in December, after intense pressure in November.
- There was more downside hedging activity than bullish bets into early 2026.
