Will Bitcoin Remain Under Bearish Control in Q1 2026?

Bitcoin's price has been significantly pressured recently, currently sitting approximately 32% below its all-time high of $126,000 and down 5.6% over the last year. Since October 10, 2025, selling pressures increased, resulting in a downward trend that led Bitcoin prices into a range of $85,000 to $90,000.

Key Takeaways

Bitcoin has decreased by 32% from its peak and is currently trading between $85,000 and $90,000.
Long-term holders of Bitcoin have begun to slow their selling, indicating a possible stabilization phase.
Institutional investors appear to be shifting their sentiment, with notable inflows into Bitcoin exchange-traded funds (ETFs).
Digital asset treasury firms are accumulating Bitcoin, providing longer-term support for the asset.
Despite potential positive shifts, bearish sentiment still dominates in the near term.

Bitcoin’s Q1 2026 trend: Will bears stay in control as LTH buying, ETF flows shift?

As we look ahead to Q1 2026, one major question arises: will this downward trend continue? Although general market optimism has been low, various on-chain and institutional indicators suggest a potential shift in sentiment. Let's explore the key factors influencing this outlook.

Long-Term Investors Adjust Their Strategies

Recent developments show signs of stabilization in the market. Long-term Bitcoin holders, defined as addresses with unspent transaction outputs (UTXOs) older than six months, have started changing their approach. Previously, this group had been selling Bitcoin since July, but now it seems they are pausing their distribution.

Data from CryptoQuant indicates that long-term holders transitioned from selling 674,000 BTC—a value of $59.8 billion—to acquiring 10,700 BTC in just one day. Though not definitive evidence of consistent accumulation, this shift highlights a change in strategy and may suggest reduced sell-side pressure from long-term investors.

Bitcoin longterm holders

Short-term and retail movements further complement this observation. Exchange Netflow data, which tracks Bitcoin inflows and outflows from centralized exchanges, shows that outflows have consistently exceeded inflows in December. To date, over $4 billion has been funneled into Bitcoin purchases, with $294 million withdrawn from exchanges in the week beginning December 29. Collectively, these trends point toward a possible stabilization phase for Bitcoin.

Institutional Sentiment Shifts with ETF Flows

U.S.-based investor activity remains crucial in signaling broader market directions. According to CoinGlass data, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced significant outflows from December 17 to 29, with institutional investors withdrawing about $1.12 billion from the market. However, a notable shift occurred when $335 million worth of Bitcoin flowed back into ETFs, marking the third-largest daily inflow since October 21. This reversal implies that institutional selling pressure could be lessening.

Bitcoin U.S. spot

On the retail side, sentiment has not mirrored the institutional shift. The Coinbase Premium Index, which measures the price difference between Bitcoin on Coinbase and Binance, remains negative. As of now, the index sits at -0.09, indicating a lack of demand among U.S. retail investors and a continued cautious outlook despite improving institutional inflows.

Digital Asset Treasury Firms as a Supportive Force

Digital asset treasury firms are poised to play a significant role in bolstering market sentiment. Since their inception, these firms have accumulated Bitcoin holdings totaling approximately $152.4 billion, equivalent to about 1.175 million BTC, according to CoinGecko. Importantly, these entities have continued to accumulate Bitcoin even amid declining prices.

Digital asset treasury firms

One notable player, Strategy, which commands the largest corporate Bitcoin treasury valued at $59.7 billion, secured over one-third of its total BTC holdings just in 2025, investing around $22 billion. If this rate of accumulation persists alongside an improvement in market conditions, Bitcoin may enter a more favorable recovery phase.

For the time being, bearish sentiment continues to dominate. The Fear and Greed Index stands at 32, reflecting a fearful market atmosphere. Any significant changes in sentiment, together with supportive macroeconomic and regulatory conditions—such as adjustments to the supplementary leverage ratio—could improve market liquidity, laying the groundwork for a sustained rally in Q1.

Conclusion

Overall, while Bitcoin's current state is characterized by bearish sentiment and downward trends, indicators suggest a potential turning point in the near future. With long-term investors pausing their selling, an uptick in institutional ETF inflows, and the growing support from digital asset treasury firms, there may be hope for a shift in momentum as we head into 2026.