Bitcoin is treading water as selling meets absorption, leaving the market stuck in a transitional phase rather than trending decisively.
Quick snapshot
- Peak: above $126,000 in October 2025
- Current range (Jan 2026): roughly $85,000–$92,000
- Net exchange flows: mostly negative, with occasional positive spikes (CryptoQuant)
- Short-term holder (STH) adjusted cost basis: ~$103,000 (per analyst Darkforst on X), implying ~15% unrealized losses for STHs
What’s happened
After the post-halving rally ran hot, BTC reversed sharply from its October highs and drifted back toward the low $90ks by January. Exchange Netflows stayed largely negative across that period, punctuated by short-lived inflows. Those inflows — and the biggest jump in Exchange Reserves — appeared around local tops (notably July and October), coinciding with higher volatility and preceding sell-offs (CryptoQuant). As prices fell, outflows took over, suggesting sellers were depleted and dip buyers stepped in, rather than a confident, sustained accumulation.
Holders and leverage
Short-term holders are currently sitting below their adjusted cost basis (around $103k), leaving them roughly 15% underwater, according to Darkforst. Losses of that size historically align with late-stage drawdowns, which implies much reactive selling may already have occurred. The price’s ability to hold the current range despite that stress points to absorption rather than panic. The ATH reset has flushed leverage and cooled overheated demand; liquidity thinned and new buyers pulled back. Meanwhile, long-term holders have remained relatively steady, acting as a floor preventing deeper declines.
What traders should watch
- Exchange Reserve growth + price stabilization: Steady reserve accumulation alongside a stabilized or rising price would suggest a shift from distribution to conviction buying.
- Reclaiming STH cost basis (~$103k): A move back above that level could rapidly flip sentiment and draw back short-term holders.
- Failure to reclaim it: Expect continued range-bound action and volatility within the current baseline scenario.
- Structural demand: Only durable, broad-based demand will turn this corrective zone into a sustained uptrend; otherwise sideways trading is likely to persist.
Bottom line
Bitcoin’s current setup is not a panic sell-off but a market caught between exhausted sellers and cautious buyers. Short-term stress is elevated, but absorption and steady long-term holder behavior have so far prevented a deeper breakdown. For now, BTC looks range-bound, and the next sustained trend will hinge on whether exchange reserves begin to grow consistently alongside price.
Sources: CryptoQuant; analyst Darkforst on X.
Disclaimer: AMBCrypto's content is informational and not investment advice. Cryptocurrency trading carries high risk—do your own research. © 2026 AMBCrypto
Read more AI-generated news on: undefined/news
