Recent days have seen US-listed spot Bitcoin ETFs experience net outflows, intensifying the pressure on a market that is already feeling the strain. As reported, Bitcoin was trading at approximately $88,750 in recent updates, reflecting a decline of about 27% from its peak of $125,100 reached on October 5. Reports indicate that a record-sized Bitcoin options expiry occurred on Friday, Dec. 26, with several analysts suggesting that this event effectively “pinned” the price into a narrow range — at least until volatility makes a comeback. Multiple sources indicate that outflows from major spot ETFs have eliminated a crucial support level for price, which previously contributed to Bitcoin’s rise earlier this year. The Crypto Fear & Greed Index has consistently indicated “Extreme Fear” since December 12, highlighting the ongoing fragility of market sentiment despite advancements in products and policies.
Large options expiries can lead to concentrated bets, potentially driving the price towards specific strike clusters. As those contracts expire, the market frequently requires a fresh catalyst to break free from the range it has been confined to. Executives overseeing substantial Bitcoin treasuries assert that the fundamentals remain robust despite the price decline. Phong Le shared insights, emphasizing that the long-term outlook for the market appears robust, while noting that short-term fluctuations “do what they do. The fundamentals of the market for Bitcoin couldn’t be better this year,” Le stated, emphasizing that he is not overly concerned with its short-term performance.
Reports indicate that Strategy’s market value in relation to its Bitcoin holdings, mNAV, has dipped below 1, currently standing at 0.93. The company holds 671,268 Bitcoin on its balance sheet, translating to an estimated value of approximately $58 billion. The data highlights how a drop in spot price can swiftly alter the calculations for companies that maintain Bitcoin on their balance sheets. Alex Thorn stated earlier this year that there was a “strong chance” the US government would indicate a formal reserve move. In March, US President Donald Trump took a significant step by signing an executive order that established a Strategic Bitcoin Reserve and a US Digital Asset Stockpile, though specifics of the plan remain under wraps.
While policy support is undoubtedly a positive factor, it’s important to note that markets do not always react instantly to changes in regulation. Signals have the potential to mitigate legal risk and expand access, yet they do not guarantee immediate purchasing activity. The mNAV reading dipping below 1, coupled with ETF outflows and a persistent fear reading at “Extreme Fear,” indicates a prevailing skepticism regarding the timing of demand’s arrival. Some players continue to adopt a systematic approach, accumulating dollar and Bitcoin reserves while adhering to model-driven strategies instead of letting emotions dictate their decisions. According to various reports and market indicators, the situation appears to be mixed. Long-term commitments from firms and clearer policy language indicate a more robust structural backing. Simultaneously, the interplay of short-term flows, options dynamics, and persistent fear suggests that price may remain volatile and confined within a range. Investors keeping an eye on fund flows and the policy calendar are poised to determine which signal will take precedence next.