Bitcoin’s rally sputtered below $90,000 over the festive season, with a mix of tax-loss selling and thin holiday liquidity frustrating buyers, according to on-chain and market analysts.
Why BTC stalled
- Early-year spot ETF demand powered Bitcoin to an all-time high of $126,000 in the first week of October, but a ten‑week pullback has since morphed into what many analysts now call a bear market.
- Short-term selling tied to tax-loss harvesting (investors realizing losses for tax benefits) and generally light orderbooks during the holidays left the market vulnerable to repeated rejections around $90k.
What the data says
- CryptoQuant analyst Julio Moreno warned that 2026 might not bring a fresh all-time high, while on-chain metrics show a rising stablecoin supply — implying buying power exists but is currently sidelined. If that liquidity re-enters the market, a push toward $100k in January is plausible.
- AMBCrypto’s recent review of positioning found sophisticated players taking defensive stances. The 1‑week 25‑Delta Risk Reversal (a measure of whether institutions are buying downside protection or upside exposure) favors hedging against declines rather than betting on aggressive breakouts.
- On the price charts, the daily trend looks bearish: selling pressure has been strong and buyers failed to hold gains above $94k. For the past two weeks, $90k has acted as a stubborn local resistance.
Liquidity dynamics and short squeezes
- As CoinGlass noted, liquidity “clusters” between roughly $91k and $96.4k sit close to the market price. Those zones can attract a derivatives‑driven short‑liquidation cascade: if shorts are squeezed, a rapid rally past $96k is possible, but such moves often reverse quickly because they’re forced by leverage rather than sustained spot demand.
- Traders should expect volatile, two‑sided risk: bulls can be swept out on fake breakouts while bears can be liquidated on sharp squeezes. Holiday thinness makes these whipsaws more likely and has already produced several sharp rejections at $90k.
Long-term holders and macro context
- There’s limited evidence of heavy selling from long-term holders, which reduces one downside pressure source.
- Crypto commentator Benjamin Cowen pointed out that a bounce to the 200‑day moving average (around $106.8k) would likely form a macro “lower high,” suggesting any rally up to that level may not herald a sustained return to new peaks.
Bottom line
Markets remain fragile and mixed: sidelined stablecoins and the potential for derivatives‑driven squeezes could spark short, sharp rallies, but defensive institutional positioning and thin holiday liquidity make sustained breakouts uncertain. Traders should remain cautious and watch for real spot demand entering the market before assuming a move back toward all‑time highs.
Disclaimer: This article is informational only and not financial, investment, or trading advice. Cryptocurrency trading carries high risk; readers should do their own research before making decisions. © 2026 AMBCrypto (sources: CryptoQuant, TradingView, CoinGlass, AMBCrypto)
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