Following the short squeeze in mid-December, Bitcoin has not experienced any notable price gains, encountering several rejections at the $90,000 level. The leading cryptocurrency is currently consolidating around $87,000, as investors wait for a definitive market direction. Pseudonymous analyst Sunny Mom indicates that recent on-chain analysis implies that bearish sentiment is likely to persist in the upcoming months after the initial prolonged correction in October and November.
Why Rising Short-Term Bitcoin Supply Is Flashing A Rare Bearish Signal
In a QuickTake post on December 27, Sunny Mom highlights the BTC HODL waves, indicating the increasing proportion of short-term holders coinciding with declining prices, turning a metric that usually supports bullish scenarios. Historically, a rise in short-term holder (STH) supply, referring to coins held for less than 155 days, suggests new capital is entering the market in anticipation of sustained rallies. However, the analyst describes the current movement as “passive bag-holding” instead of indicating “new blood.”
This situation arises from investors who purchased during the $120,000 rally in October—driven by FOMO—along with dip buyers in November now facing unrealized losses, which alters the market behavior. Sunny Mom clarifies that each relief rally faces selling pressure as these holders aim to exit at breakeven, transforming the growing STH cohort into a ceiling rather than a support. Consequently, price rebounds struggle to gain momentum.
The prominent analyst notes an emotional toll visibly seen on-chain. Significantly, there have been recurrent spikes in Net Realized Loss (NRL) since the October liquidations, indicating an ongoing capitulation as investors lock in losses after enduring for months. Sunny Mom characterizes this phenomenon as a “dull knife” that has finally cut deep, suggesting that weaker hands are being expelled not by a sudden crash, but through prolonged exhaustion.
Bitcoin In Demand Vacuum As Likely Fall Below $80,000 Remains Active
In further analysis, Mom attributes the current bearish landscape to a demand vacuum. The market expert explains that exchange reserves are at multi-year lows, indicating limited immediate sell-side liquidity. Concurrently, long-term holders (LTHs) show minimal interest in distributing their coins, reinforcing the notion that conviction capital remains strong.
As a result, the issue lies on the demand side. With macroeconomic uncertainty remaining high, potential new buyers appear reluctant to enter the market, resulting in a demand vacuum. This also contributes to thin order books, meaning even slight selling pressure could lead to sharp price declines.
While some market observers anticipate a possible recovery in Q1 2026, citing expectations of rate reductions and improved global liquidity, Mom suggests Bitcoin may require a “final shakeout” to address the imbalance and reset the market for a bullish breakout. The analyst refers to a potential move below $80,000 as a liquidity hunt aimed at flushing out remaining weak hands, allowing larger holders to reaccumulate.
