Bitcoin Testing A Demand Pivot Point

Bitcoin Options Weigh On Price

Last week, Bitcoin experienced two of the three most significant liquidation events in 2025, with approximately $2.8 billion in long liquidations.

In contrast, gold and the S&P 500 traded around all-time highs.

While there is a tendency for investors to try to explain away price action by weaving a narrative around fundamentals, the $18 billion in options that expired on Friday is a likely factor.

Market makers will know that the short-term cost basis is $108k, and therefore, pushing the BTC price down to that zone would ensure they minimise their losses at expiry.

Market Transition

The bitcoin market has undergone a significant transition since April.

The market sold off in response to the tariff tantrums, and since then, the derivatives market has played a more significant role.

More leverage has been evident, as reflected in the increase in liquidation volumes.

Retail speculation during this period has shifted significantly toward Treasury companies and spot ETFs.

ETF flows have slowed significantly. However, we have not yet seen a sustained period of “loss of confidence” outflows.

Treasury company MNAVs have converged towards one, which has significantly reduced the bid.  

In short, the two main drivers, the ETFs and Treasury companies, have slowed significantly.

That does mean that currently there is a demand problem.

NOTE: The cure for demand problems is a lower price.

If the demand problem persists, we are likely in a late cycle.

If the four-year cycle is still in play, the BTC price should top in the next quarter. Many investors will trade on that self-fulfilling prophecy.

Bear Market

So is BTC in a bear market? It could be.

Hodlers have sold a lot on the way up. They sell into strength and when the market actually has the demand.

The market doesn’t have the demand at this point, and sell-side pressure from holders is waning. They’re allowing the market to find its level again.

While BTC is unlikely to reach all-time highs in the near term, there is little evidence of a loss of confidence, and the losses at this point are likely not severe enough to trigger a cascade to the downside.

That is unlikely to happen before BTC hits $80k. (The cost basis for Strategy is $80k, and the cost basis for IBIT holders is $79k).

As noted above, $108k is important because that’s the short-term cost basis. That’s where BTC should find support.

Approximately 40% of all the dollars that have ever been invested in BTC are currently held in the 90k to $108k zone.

That is a significant zone.

That said, a drawdown, although undesirable, is always a possibility. Markets want to test investor patience. To find the maximum pain.

Unrealised losses can spike very quickly, and confidence can shift just as rapidly.