Is Bitcoin Losing Momentum Before 2026? Insights from Recent Data

Recent data indicates that Bitcoin (BTC) may be experiencing a decline in strength, particularly as retail investors retreat while large holders continue to accumulate. Key metrics reveal a concerning market structure, with BTC trading below its Active Realized Price, potentially leading to short-term selling pressure. Additionally, institutional dynamics could shift if MSCI decides to exclude crypto-exposed firms from its indexes early next year.

Key Takeaways

Retail wallets are decreasing, while large holders have added 91 new whale addresses, indicating retail fatigue.
Short-term pressure and weakening market efficiency may emerge soon.
Bitcoin’s essential market structure is showing more complexities than initially apparent.
Large holders are still purchasing, but smaller wallets are reducing, suggesting retail investor fatigue.
BTC is currently trading under its Active Realized Price, which typically increases short-term selling pressure if unaddressed.
The MSCI is contemplating the removal of crypto-heavy firms early next year, which might challenge institutional flows.

Large Holders Keep Accumulating Bitcoin

According to Santiment, the number of wallets holding at least 100 BTC has seen a 0.47% increase since November 11, adding 91 new large holders to the ranks.

Whales are buying while retail steps back - What's next for Bitcoin?

In contrast, smaller wallets—particularly those containing 0.1 BTC or less—are on a steady decline. This trend reveals that retail investors are withdrawing, while larger players continue to expand their holdings. Although this may initially appear as a sign of short-term weakness, the capitulation of retail investors is likely laying the groundwork for healthier long-term market conditions. Stronger hands often lead to increased market stability, less volatility, and a more sustainable pricing structure.

Critical Price Level to Monitor

At the time of reporting, Bitcoin was trading below a crucial level known as the Active Realized Price, which is around $88,800. This price reflects what active investors paid for their BTC and disregards long-dormant coins. When Bitcoin trades above this level, most active holders are in profit, generally reducing selling pressure. However, being below this price can make investors uneasy, often resulting in more short-term selling if the price does not rebound quickly.

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If Bitcoin can regain its footing above $88,800, it would likely bring relief to active market participants.

New Challenges on the Horizon

Adding to the current challenges, Bitcoin may soon encounter pressure from traditional finance (TradFi) sectors. The MSCI is considering removing companies with more than 50% exposure to crypto from its indexes, with a final decision due in January 2026.

bitcoin

This potential change is significant because index exclusions could compel institutional investors to reduce or exit their positions in those companies. Such actions could inadvertently heighten selling pressure on Bitcoin, particularly if major crypto-related firms face substantial outflows.

While no decisions have been finalized, this is a risk that investors should monitor closely as the date approaches. Additionally, Bitcoin's annualized Sharpe Ratio has seen a decline, indicating a less efficient market in the short term. Past occurrences of similar declines in 2019, during the 2021 peak, and in the subsequent 2022 capitulation have led to slower market phases before renewed strength appeared.

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The current short-term outlook appears bearish; however, previous resets have often preceded significant long-term bull cycles.