This price performance resulted in Bitcoin lagging US Treasuries for the first time this year, erasing one of 2025’s most popular macro trades.
Yet analysts say the move reflects a structural reset rather than a systemic collapse.
Long-term holders have played a significant role in driving the flagship digital asset’s downward trend by realizing profits at record rates.
According to him:
“Assuming they sold at an average price of $110,000, that’s about $72,000 in profit per coin. So, $154B / $72K ≈ 2.1 million coins sold.”
Data from James Check at CheckOnChain further reveals that Bitcoin currently faces $34 billion in monthly sell-side pressure as older coins return to exchanges.
That inflow has largely offset weakening demand from ETFs and corporate treasuries, some of which have shifted focus to share buybacks instead of new crypto allocations..
At the same time, speculative activity is also fading in the market.
Data from Glassnode shows that the funding rates for perpetual futures have decreased by 62% since August, from approximately $338 million to $127 million per month, reflecting lower leverage.
The firm stated:
“This underscores a clear macro downtrend in speculative appetite, as traders grow reluctant to pay interest to maintain long exposure.”
Meanwhile, the fading enthusiasm comes amid tightening global liquidity.
The prolonged US government shutdown, the joint-longest on record, has immobilized roughly $150 billion in the Treasury General Account, removing liquidity that circulates typically through risk assets.
Due to this wave of selling activity, Check estimates that 57% of all dollars invested in Bitcoin are now in loss. His cost-basis model, which values each coin at its last on-chain transaction, reflects what he calls the market’s recency bias.
He wrote:
“We price every coin when it last transacted onchain, and this helps us interpret sentiment based on our recency bias We don’t think about our coins from prior cycles as much as the ones we bought 3-days ago.”
Considering this, he pointed out that roughly 63% of capital invested carries a cost basis above $95,000, making that level the key psychological and structural support.
He also noted that unrealized losses total nearly $20 billion, or about 3% of market capitalization. Historically, bear markets have begun once unrealized losses exceed 10%.
Therefore, if prices drop below $95,000, he anticipates a deterioration in sentiment. Prior corrections in 2024 and early 2025 stabilized when losses reached 7–8% of market cap. Anything deeper could signal that a new bear phase is underway.
Check noted:
“Obviously nobody wants to make that call AFTER the price has already fallen, which is why $95k is a critical line in the sand to hold, as it deteriorates below.”
Industry analysts remain divided on whether Bitcoin’s recent pullback marks the beginning of a new downtrend or simply a mid-cycle reset.
Check said:
“There has been a tremendous rotation of coins in 2025, and a lions share of it has occurred above $95k. We don’t want to see the price fall below $95k, but I also expect the bulls to mount one hell of a fight to defend it. Prepare for a bear but dont believe the doomers.”
According to him, the heavy issuance of Treasury securities has siphoned liquidity from the money markets. However, he believes this dynamic will reverse once policymakers reopen the government and resume balance-sheet expansion.
He wrote:
“If the current money market conditions persist, the treasury debt pile grows exponentially, the SRF balance must grow as the lender of last resort. As SRF balances grow, the amount of fiat dollars in the world expands as well. This phenomenon will reignite the Bitcoin bull market.”
On CNBC, he described the recent downturn as “a tale of two markets,” where retail traders capitulate amid leverage washouts while institutions quietly increase exposure.
Considering this, Hougan stressed that BTC’s risk-adjusted outlook remains unmatched, but the days of 100x yearly returns are gone. He added:
“We’re unlikely to see 100x returns in a single year. But there is still massive upside once the distribution phase is complete…[However, we still] believe bitcoin will reach $1.3 million by 2035, and I personally think we’re being conservative.”
At the same time, he believes BTC’s era of 1% allocation is over as its lower volatility makes it more attractive to hold.
“As an allocator, my response to this dynamic would not be to sell the asset—after all, we forecast bitcoin to be the best-performing large asset in the world over the next decade—but rather, to buy more of it. Put differently, lower volatility means it’s safer to own more of something.”
