Bitcoin (BTC-USD) has been experiencing turbulent waters as it hovers near the $86,000 mark. Market analysts on Wall Street express caution about the potential for a significant rebound as the year comes to a close. Recent uncertainties have been fueled by fluctuations in artificial intelligence-related stocks, alongside speculation regarding the future leadership of the Federal Reserve once Jerome Powell’s term concludes next year.
Nic Puckrin, an investment analyst and co-founder of Coin Bureau, noted, “For a while, the market was convinced that ultra-dove Kevin Hassett was a shoo-in for the next Fed Chair role, but now Kevin Warsh—a far more hawkish candidate—appears to be emerging as the frontrunner.” This shift in expectations is contributing to a cautious sentiment among investors.
Adding to the prevailing unease is the seasonal trend of tax-loss harvesting, which typically intensifies in December. This practice involves investors selling off underperforming assets to offset capital gains. With many cryptocurrencies, including Bitcoin, experiencing losses this year, the pressure is compounded. Puckrin suggested that if the downward trend continues, Bitcoin could potentially dip below the $80,000 threshold by the year’s end.
The landscape is further complicated by long-term holders of Bitcoin, who still command a significant portion of the total supply. Recent analyses from Compass Point indicate that 60% of Bitcoin is held by wallets containing over $85 million worth of the asset. In contrast, spot exchange-traded funds (ETFs) and digital asset treasury firms together own approximately 13% of the total Bitcoin supply, underscoring the concentration of ownership among “HODLers.” This group has been notably active in selling recently, which seems to exert downward pressure on prices.
Analyst Ed Engel pointed out, “Since July 2025, this cohort has ramped up selling activity and continues to unwind today. Until this cohort normalizes selling activity, we remain cautious on BTC prices near-term.” Bitcoin’s value has plummeted from a high of around $126,000 in early October, primarily due to selling by large investors, often referred to as “whales,” and a wave of forced liquidations of leveraged positions.
As of now, Bitcoin’s year-to-date performance shows a decline of approximately 6%, indicating it may decouple from the S&P 500 for the first time since 2014, raising further questions about its correlation with traditional markets as the year draws to a close.
