Analysts point to old whales for BTC's drop to $85,000

Bitcoin’s Monday drop to $85,000 indicates that both new whales and long-term holders are contributing to the decline. On-chain data also revealed that unrealized losses for BTC whales have reached levels not seen since 2023.

CryptoQuant also found that wallets that purchased BTC over the past three months recorded a profit/loss margin of -25%. The analytics firm acknowledged that a drop in the range of -12% to -37% historically led to bull run reversals.

BTC’s drop shows short-term holders under pressure

Shivam Thakral, CEO of BuyUCoin, said new whales exiting the market don’t automatically imply forced selling. He added that capitulation risk increases if Bitcoin loses cost-basis levels for recent buyers, especially around ETF or institutional entry zones.

On-chain data revealed that Bitcoin’s sell-side pressure differs across all investor cohorts. The data signals a divergence between long-term and short-term holders.

Short-term holders recorded a 30-day net position change of more than 768,000 BTC as of December 15. The increase shows a sign of accumulation in the markets. 

On-chain data also showed that the net position change for long-term holders was -755,000. The data signals distribution in the Bitcoin market. 

The supply held by long-term BTC holders has decreased by approximately 1.78 million BTC to 13.68 million BTC over the past four months. The supply held by the short-term holders has risen by approximately 1.8 million BTC to 6.28 million BTC since July. 

Thakral also believes that the current BTC level looks less like a structural top and more like a classic wealth transfer phase. The analytics firm added that the shift from long-term to short-term holders sets the base for consolidation before the next leg higher.

At the time of publication, Bitcoin is exchanging hands at around $86,331, down nearly 4% in the last 24 hours. BTC has also plummeted more than 4.3% in the last 7 days and 10.45% in the last 30 days.

CryptoQuant revealed that the realized price for Bitcoin short-term holders has remained at $104,000 since October 30, 2025. The analytics firm stated that there’s a significant divergence between the market price and the short-term capital cost basis, primarily due to the gap between Bitcoin’s price and the short-term realized price.

On-chain data also revealed that short-term holders who have exited the market since October 30 saw realized losses. Short-term holders recorded an average high loss of around -12.6%, signaling an active capitulation process.

CryptoQuant suggests that liquidations drove BTC’s price lower

A report by XWIN Research Japan revealed that Bitcoin’s drop was driven less by spot market selling but by forced liquidations in the derivatives market. The research firm argued that Bitcoin’s drop was largely liquidation-led, as its sharp price drops coincided with spikes in long liquidations.

The DeFi asset management platform noted that highly leveraged long positions in futures markets as the main cause of the liquidation-led market. XWIN Research Japan stated that a drop in BTC’s price below key levels leads to long positions being forcibly closed due to breaching maintenance margin requirements.

The firm added that liquidations are set as market sell orders, which adds sudden selling pressure and causes the market to drop further.

According to the report, liquidations also amplify the drop in falling prices by triggering a cascade of forced selling. CryptoQuant’s chart revealed a similar chain reaction occurring with Bitcoin.

The analytics firm acknowledged that the current move should be considered less as a collapse in fundamental demand. CryptoQuant believes it should be viewed more as a structural deleveraging event.

Get up to $30,050 in trading rewards when you join Bybit today