Bitcoin Holds Above $90,000 Amid ETF Outflows and Long-Term Holder Distribution

Bitcoin Price Movement Shows Limited Recovery

Bitcoin experienced a constrained recovery this week as investor liquidity gradually returned following the holiday period. The cryptocurrency reached a weekly peak of $94,458 on Monday before declining to approximately $90,937 by Friday ^[1]. At the close of the week, Bitcoin was trading at $90,814, maintaining a position near the $90,000 threshold ^[3].

The asset remained tightly rangebound, trading about 2% below its seven-day high of $91,839 and roughly 1% above its seven-day low of $89,671 ^[3]. Daily trading volume totaled approximately $45 billion, while Bitcoin's total market capitalization stood at around $1.80 trillion ^[3].

ETF Flows Reverse After Strong Start

US spot Bitcoin exchange-traded funds experienced a sharp reversal in demand following an initial surge. The ETFs recorded $1.1 billion in inflows during the first two trading days of the new year, but subsequently logged three consecutive days of outflows ^[1]. On Thursday alone, a cumulative $398 million was sold, according to data from Farside Investors ^[1].

BlackRock added $900 million in Bitcoin to its holdings as selling pressure from long-term holders reached levels not seen since 2017 ^[2].

Historic Distribution by Long-Term Holders

Long-term Bitcoin holders underwent one of the most aggressive distribution phases on record in 2025. Nearly $300 billion worth of Bitcoin that had remained dormant for over a year re-entered circulation ^[2]. The 30-day period between November 15 and December 14, 2025, marked one of the heaviest long-term holder distribution periods in more than five years ^[2].

The long-term holder supply declined from 15.4 million BTC in June to 13.5 million BTC by December, representing the sharpest decline on record ^[2]. The largest-ever 30-day distribution peak reached 1.14 million BTC in November ^[2].

Since December, the long-term holder supply has stabilized around 13.6 million BTC, while Bitcoin entered a sideways trading range ^[2]. The long-term to short-term holder supply ratio dropped to approximately -0.53 in December, a level that has historically preceded either base-building phases or rallies to new highs within weeks ^[2].

Institutional Capital Drives Market Repricing

The steep decline in altcoins over the past year may reflect a broader reassessment of which blockchain networks are likely to attract long-term capital as institutional investors begin a gradual, multiyear entry into the market ^[1]. Excluding Bitcoin, 2025 proved to be a bear market for the wider cryptocurrency market, with decentralized finance tokens falling 67% and cryptocurrencies associated with smart contract blockchains delivering a negative average return of 66% ^[1].

Jamie Coutts, chief crypto analyst at Real Vision, characterized the past year's poor performance as a "repricing" of leading crypto projects as institutional capital sought greater exposure ^[1]. "Repricing the highest quality (network adoption, fundamentally sound) protocols/L1s, just as the multi-year onboarding of institutional capital commences," he stated ^[1].

Solana led all blockchains in fees generated with $585 million, followed by Tron with $576 million in revenue ^[1].

Macro Uncertainty and Political Developments

Crypto markets steadied following a delay from the US Supreme Court on a ruling tied to President Donald Trump's tariff policy, temporarily easing near-term macro uncertainty ^[3]. The court delayed its decision until the following week, reducing immediate downside risk across equities, bonds, and digital assets ^[3].

Cathie Wood of ARK Invest suggested in a recent podcast that politics could drive the United States to actively purchase Bitcoin in 2026, arguing that crypto has become a durable political issue for President Trump ^[3]. While the US currently holds a Bitcoin reserve made up of seized assets, Trump has pledged not to sell any of the holdings ^[3]. Wood proposed that the administration may move from holding only confiscated Bitcoin to purchasing BTC outright for a national strategic reserve ^[3].

DeFi Market Developments

Perpetuals decentralized exchanges closed 2025 with cumulative trading volume reaching $12.09 trillion, up from $4.1 trillion at the start of the year ^[1]. Approximately $7.9 trillion of this lifetime total volume was generated in 2025, meaning that 65% of all perpetual DEX trading volume occurred in a single calendar year ^[1]. In December alone, perpetuals trading volume reached $1 trillion ^[1].