Bitcoin moved fast. Then it pulled back just as quickly. A sudden surge pushed BTC to roughly $90,087 on Coinbase a few hours ago.
The rally looked decisive at first. It wasn’t. Price faded soon after, sliding back toward the $86,580 zone where it now trades. The move reignited debate around leverage, supply pressure, and whether the market is building toward $100K, or stalling beneath it.
😮 Bitcoin saw an enormous jump to ~$90,087 on @coinbase 2 hours ago before quickly sliding back to its current ~$86,580 market value. Bitcoin’s rising positive funding rates on exchanges signals more leveraged long positions, which historically has led to sharp liquidations and… pic.twitter.com/JOmk3eNnCW
— Santiment (@santimentfeed) December 17, 2025
Two forces are shaping this moment. One is visible in derivatives markets. The other sits quietly on-chain.
Bitcoin supply dynamics are shifting fast.
According to @K33Research, nearly $300B worth of previously dormant $BTC re-entered circulation in 2025, driven by long term holder sales, OTC deals, and ETF absorption. That represents one of the largest supply unlocks in Bitcoin’s…
— Crypto Miners (@CryptoMiners_Co) December 18, 2025
A Violent Spike, a Familiar Rejection
The push to $90K followed a pattern traders know well.
Momentum accelerated. Stops triggered. Liquidity thinned. Then sellers stepped in. The rejection did not take days. It took minutes. That speed matters. It suggests positioning, not fresh spot demand, powered the move.
Bitcoin has tested this area before. Each time, it has struggled to hold above it without a reset in leverage. This latest spike was no different. The market reached higher prices, but conviction failed to follow.
That leaves BTC back in a range. Not broken. Not confirmed. Just unresolved.
Funding Rates Reveal Crowded Longs
Bitcoin funding rates across major exchanges are trending higher again. That is the clearest signal in the room.
Positive funding means longs are paying shorts. It reflects a growing imbalance. Traders are leaning bullish, often with leverage. Historically, that setup increases the risk of sharp liquidations. When price stalls or dips, forced selling kicks in. Volatility spikes. Weak hands exit.
Recent market tops and pullbacks have followed this exact sequence. Funding climbs. Price rallies. Liquidity flips. Then the unwind begins.
The rejection at $90K fits cleanly into that historical framework. Until funding cools, every upside attempt carries extra fragility.
Ethereum Tells a Quieter Story
Ethereum is sending a different signal.
While Bitcoin longs dominate derivatives positioning, Ethereum currently shows shorts outweighing longs. That imbalance suggests weaker bullish conviction. It also points to lower immediate liquidation risk compared to BTC.
This divergence matters for relative volatility. Ethereum’s market looks less crowded. Moves are slower. Reactions are softer.
But directionally, ETH still follows Bitcoin.
If Bitcoin funding stays elevated and price remains unstable, Ethereum and the broader altcoin market will struggle to mount sustained rebounds. BTC still sets the rhythm. Everything else adjusts to it.
For altcoins to recover meaningfully, Bitcoin must stabilize first.
Bitcoin’s Supply Is Reawakening
Beyond leverage, supply dynamics are shifting fast.
According to K33 Research, nearly $300 billion worth of previously dormant Bitcoin re-entered circulation in 2025. That flow came from long-term holder sales, OTC transactions, and ETF absorption. In scale, it marks one of the largest supply unlocks in Bitcoin’s history.
This is not panic selling. It is redistribution.
Coins that sat idle for years are moving. Early holders are taking profit. Institutions are absorbing some of that supply. OTC desks are smoothing transfers that never hit public order books. But the net effect is clear, more Bitcoin is available than before.
Supply that was once locked is now liquid. And liquid supply changes market behavior.
Long-Term Holders Are Selling, Heavily
On-chain data reinforces the picture.
Metrics from CryptoQuant show the heaviest long-term holder distributions in over five years during the last 30 days. Selling pressure currently outweighs demand. ETF flows have turned negative. Retail participation is weakening.
This combination creates friction.
ETFs were a major absorption channel earlier in the cycle. As flows slow or reverse, that cushion disappears. At the same time, long-term holders are actively reducing exposure. The result is a market that needs time to digest supply.
Price does not collapse. It grinds. Volatility increases. Breakouts fail. Ranges expand.
That is exactly what Bitcoin is showing now.
Late-Cycle Redistribution, Not Capitulation
Despite near-term fragility, the broader structure remains intact.
K33 notes that this distribution phase may be approaching exhaustion. Early holder selling is expected to fade by early 2026. As that pressure eases, supply dynamics could stabilize. Institutional portfolios may rebalance. Accumulation could resume at higher conviction levels.
This framing matters.
What the market is seeing does not resemble panic-driven capitulation. There are no disorderly cascades. No liquidity black holes. Instead, this looks like a late-cycle redistribution. Coins are changing hands. Ownership is shifting. Risk is rotating.
That process is uncomfortable. But it is not inherently bearish.
Why $100K Depends on Funding, Not Headlines
The path back to $100,000 is still open. But it is conditional.
Bitcoin’s funding rates must normalize. Neutral or negative funding would signal healthier positioning. It would show that rallies are driven by spot demand, not leverage. That environment gives breakouts room to breathe.
Without it, upside attempts remain vulnerable. Each push higher risks becoming another liquidation event rather than a sustained trend.
Altcoins are watching closely. They cannot decouple yet. Their rebound depends on Bitcoin first resolving its leverage imbalance and absorbing supply without disruption.
A Market in Transition
Bitcoin is not breaking down. It is transitioning.
Leverage is elevated. Supply is active. Demand is selective. That mix produces volatility, not clarity. Short-term traders face chop. Long-term participants watch positioning and flow.
The spike to $90K and the pullback to $86K are not contradictions. They are reflections of the same underlying reality, a market late in its cycle, redistributing ownership, and searching for balance.
When that balance returns, direction will follow.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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