Bitcoin Caught Between Buyers and Sellers: Is the Next Big Move Brewing?

Bitcoin is trapped in a precarious equilibrium, supported by persistent buying pressure yet weighed down by mounting losses and profit-taking from long-term holders. With the FOMC meeting looming and options traders pricing in significant volatility ahead, the question isn’t whether Bitcoin will move—it’s when, and in which direction.

The Price Cage: Where Bitcoin Stands

At $93.21K, Bitcoin remains sandwiched between two critical levels. Above sits the short-term holder cost basis around $102,700, a barrier the market has repeatedly failed to breach. Below lies the true market mean at $81,300, which continues to serve as an invisible floor. This narrow trading range reflects a market in psychological tension—neither buyers nor sellers have won decisively.

The numbers tell a story of strain. Unrealized losses have climbed to levels not seen since early 2022, with the 30-day relative unrealized loss metric hitting 4.4% after languishing below 2% for nearly two years. This shift from market euphoria to growing stress is palpable in trader behavior: the longer Bitcoin stays in this range, the more patience erodes and capitulation risk rises.

Capitulation Meets Profit-Taking

What makes this range particularly unstable is the simultaneous occurrence of two powerful forces: newcomers giving up and old hands cashing out.

Realized losses have ballooned to $555 million per day on average—the highest since the FTX collapse—even as Bitcoin rebounded from its November 22 low to $92,700. This counterintuitive pattern reveals the frustration of buyers who entered near recent highs. Rather than holding through the bounce, they’re surrendering, converting unrealized losses into realized ones.

Simultaneously, holders who’ve owned Bitcoin for over a year are booking record profits. The 30-day realized profit average peaked above $1.3 billion per day as these seasoned investors took their gains. Together, these two dynamics—capitulation from weak hands and profit harvesting from strong hands—explain why Bitcoin struggles to gain traction despite persistent underlying demand.

Demand: The Underrated Support

Yet despite this selling tsunami, Bitcoin hasn’t collapsed below the true market mean. This reveals a crucial detail: patient buyers are absorbing the entire sell-off. They’re stepping in quietly while the headlines focus on losses and uncertainty, creating a subtle but significant floor under the market.

If capitulation from high-level buyers accelerates and shows signs of exhaustion, this patient demand could easily drive a retest of the $95,000 level (the 0.75 cost basis quantile) or even challenge the short-term holder cost basis. The conditions for a short-term rally exist—they just need a catalyst and confirmation that sellers are running out of ammunition.

The Institutional Cold Shoulder

The spot market, traditionally a source of strength for Bitcoin, is showing clear signs of institutional retreat. US Bitcoin ETF inflows turned negative starting in late November and remain sluggish. Major institutional issuers continue steady redemptions, signaling a more defensive posture across the institutional allocator community amid broader market instability.

This institutional cooling has direct consequences: spot trading volume has contracted significantly, now hovering near the lower end of its 30-day range. With less institutional firepower available to support demand, Bitcoin becomes more vulnerable to macro shocks and sudden volatility swings. The reduced liquidity means smaller moves can trigger larger percentage reactions.

Derivatives: Caution, Not Conviction

The futures market echoes this institutional hesitation. Open interest remains subdued, failing to rebuild meaningfully, while funding rates hover near neutral or slightly negative. Traders are maintaining balanced, defensive stances rather than aggressively pushing leverage in either direction. This lack of speculative enthusiasm means price discovery is now leaning more heavily on spot flows and macroeconomic catalysts rather than derivative expansion.

Options Market Bracing for Impact

Where the market’s true state of mind becomes visible is in the options pits. While spot volume withers, short-term implied volatility has surged unexpectedly. Twenty-delta call and put options show one-week IV rising roughly 10 volatility points from the previous week, while longer-dated contracts remain relatively calm. The volatility surface reveals a market preparing for near-term turbulence rather than relaxed conditions.

The puts are particularly telling. The 25-delta skew—measuring the relative cost of downside protection versus upside calls—has climbed to roughly 11% for one-week expirations, the highest level this period. This compression across maturities (ranging from 10.3% to 13.6%) signals a broad, consistent preference for put protection rather than isolated short-term hedging, reflecting a systemic risk-averse stance.

Option flow data confirms this outlook: traders are accumulating volatility rather than selling it. They’re buying both calls and puts simultaneously, seeking convexity and hedging rather than betting directionally. This hedging posture suggests market participants expect a significant event—something large enough to warrant paying premium for both sides of protection.

The FOMC Catalyst Ahead

The December 10 FOMC meeting represents the last major macro catalyst before year-end. Options traders are clearly positioned for potential volatility around this announcement. If the Fed surprises with hawkish guidance, downside protection becomes valuable. If policy is dovish, the calls come into play. Either way, traders expect movement.

Historically, once this final major event passes, implied volatility begins to decay. Sellers typically re-enter post-announcement, accelerating the compression of the volatility surface through December. Unless the Fed delivers a genuine surprise, the path of least resistance points toward lower IV and a flatter volatility profile entering 2025.

The Waiting Game

Bitcoin’s current state can be summed simply: the market is stable but struggling. Demand remains resilient enough to prevent collapse, yet selling pressure is formidable enough to prevent breakouts. Time, however, is working against the bulls. The longer Bitcoin lingers in this range without fresh catalysts, the more psychological strain accumulates on holders, and the higher the probability of forced capitulation and realized losses.

The near-term question boils down to this: Will improving liquidity and a shift in sentiment allow Bitcoin to reclaim $95,000 and challenge the short-term holder cost basis? Or will this time-driven bearish pressure persist, eventually grinding down weak hands until capitulation exhausts itself? The options market has already placed its bet—it’s pricing in volatility. Whether that manifests as a relief rally or a capitulation dive depends on how the FOMC meeting unfolds and whether institutional demand returns to support the recovery.