Bitcoin's Crossroads: Short-Term Pain, Long-Term Gain?

Wednesday Dec 3 2025 09:50

Duration

2 min

  1. 1. Bitcoin at a Crossroads: Is Accumulation Time Nearing?

  2. 1.1 Optimistic 2026 Outlook Despite Current Correction

  3. 1.2 Bitcoin ETF Impact on Selling Pressure Examined

  4. 1.3 Bitcoin ETFs Show Signs of Recovery

Bitcoin at a Crossroads: Is Accumulation Time Nearing?

Bitcoin may be nearing a critical juncture as short-term traders grapple with the most substantial unrealized losses of this bull cycle. CryptoQuant analyst Darkfrost notes that Bitcoin (BTC) holders for one to three months have endured losses between 20% and 25% for over two weeks, marking the current market cycle's most painful stretch. "Once a large portion of them has capitulated, as we have seen in recent weeks, that is usually when the opportunity to accumulate becomes interesting," he stated on Monday. He further added that this cohort will remain underwater until BTC climbs above its realized price of approximately $113,692.

Optimistic 2026 Outlook Despite Current Correction

Despite the ongoing correction, some of the largest financial institutions maintain a positive outlook for Bitcoin's performance in 2026. Asset management giant Grayscale indicated on Monday that Bitcoin's present drawdown suggests a local bottom is forming ahead of a recovery in 2026 – a scenario that could challenge the conventional four-year cycle theory, according to the firm.

Bitcoin ETF Impact on Selling Pressure Examined

Contrary to earlier concerns regarding large-scale sales from spot Bitcoin exchange-traded fund (ETF) investors, these funds accounted for only a small fraction of the selling pressure driving Bitcoin's price decline. Bloomberg ETF analyst Eric Balchunas commented on Monday, "I just read that Citi analysts say that for every $1 billion pulled from Bitcoin ETFs it equals roughly a 3.4% drop in Bitcoin's price. Ok, so then by that logic, since the ETFs have taken in +$22.5b of inflows YTD BTC should be up 77% this year. ETFs have been like 3% of the total selling tops."

Bitcoin ETFs Show Signs of Recovery

Bitcoin ETFs have begun to rebound from the cumulative outflows of $3.48 billion experienced in November, which was their second-worst month on record. On Tuesday, Bitcoin ETFs reported net positive inflows of $58 million, marking their fifth consecutive day of positive inflows, according to data from Farside Investors. These modest inflows could persist as Bitcoin trades above the flow-weighted cost basis for ETF buyers, which is roughly $89,600, suggesting that the average holder is no longer experiencing paper losses. Regarding other US crypto funds, spot Ether (ETH) ETFs witnessed outflows of $9.9 million on Tuesday, while Solana (SOL) ETFs recorded net negative outflows of $13.5 million, as per Farside Investors.

Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.

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Written by:

Emma Rose

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