Long term holders continue to cash out, Bitcoin falls below the $86000 mark!

The cryptocurrency market has once again experienced severe volatility, with the price of Bitcoin falling below the critical threshold of $86000 in recent days, a drop of over 30% from the historical high of $126000 set two months ago, officially entering a bear market zone. The core driving force behind this price drop comes from the continuous cash out of long-term holders, coupled with weak market liquidity and decreased risk appetite, the cryptocurrency market is facing a "gradual decline" bottoming out dilemma.

The concentrated selling of long-term holders became the key straw that crushed the market. According to the K33 Research report, compared to early 2023, the number of bitcoins that have not entered the trading market for at least two years has decreased by 1.6 million, corresponding to a value of approximately $140 billion; In just 2025, nearly $300 billion of dormant Bitcoin will re-enter the circulation field. It is worth noting that the current market's ability to absorb incremental circulating Bitcoin has significantly weakened. The US spot Bitcoin ETF, which previously supported the rise of Bitcoin, has shifted from net inflows to net outflows, and the enthusiasm of retail investors has also fallen to a low point, forming an imbalanced pattern of "selling pressure not decreasing, insufficient buying orders".

The price breakthrough triggered a chain reaction in the market, and the scale of contract liquidation surged. According to Coinglass data, on the day Bitcoin fell below the $86000 mark, the total amount of cryptocurrency contracts liquidated on the internet exceeded $600 million, with 184600 people liquidated. Among them, the proportion of multiple liquidated amounts exceeded 80%, and the largest single liquidated order occurred in Binance BTC USDT, with a value of $11.5818 million. At the same time, cryptocurrency related concept stocks simultaneously weakened, with BMNR and Riot Platforms falling more than 10%, WeStrategy Investment falling more than 8%, Coinbase falling more than 6%, and market panic continuing to spread.

The deterioration of macro environment and market liquidity has further exacerbated the downward trend. Recently, although Bitcoin has fallen in sync with risky assets such as the US stock market, it has not followed the rebound of the latter, breaking the traditional positive correlation trend. Even though the Federal Reserve implemented interest rate cuts last week, it failed to revive the momentum of the cryptocurrency market, highlighting the current market being squeezed by the dual pressures of weak liquidity and declining risk appetite. In addition, the sustainability of huge capital expenditures in the field of artificial intelligence has raised market concerns, and AI leading stocks continue to adjust, further dragging down the overall performance of risk assets.

Regarding the future market direction, there is a divergence of views within the industry. Ergonia research director Chris Newhouse pointed out that this decline was driven by continuous selling of spot stocks, rather than a chain reaction caused by forced liquidation with leverage. This "mild but persistent" selling pressure is more difficult to reverse, and market reversal is more challenging. Georgii Verbitskii, founder of the cryptocurrency investment platform TYMIO, even predicted that Bitcoin may experience long-term consolidation, with the possibility of falling to $70000 or even $60000. However, some optimistic voices believe that the selling pressure of long-term holders is approaching saturation, and about 20% of the Bitcoin supply in the past two years has been restarted. It is expected that the scale of investor selling will significantly decrease in early 2026.

The current market is closely monitoring economic data from the United States and policy movements from the Bank of Japan in search of clear clues regarding the path of interest rates. For investors, in the context of thin market liquidity and obvious downward trend characteristics, the uncertainty of the cryptocurrency market has significantly increased, and risk prevention and control have become the primary prerequisite.