Bitcoin closed the year slightly in the red, marking a rare break in the long-observed four-year cycle pattern of one red year followed by three green years. The annual decline was modest – about 6% – and negligible compared to historical declines in previous bearish years. But despite its limited scope, the red close carries symbolic weight, signaling a shift in market behavior rather than outright weakness.
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Recent chain analysis by Axel Adler adds important context to this change. Cumulative Net Taker Flow data shows that aggressive purchasing peaked around the new year before disappearing. Since then, the balance of market aggression has tilted towards the sellers, albeit not in an extreme way.
The indicator is currently in a moderately negative range, indicating that sell-side pressure has increased but is still far from capitulation levels.
Historically, similar conditions have coincided with increased downside sensitivity rather than immediate trend reversals. In practical terms, this suggests that Bitcoin is vulnerable to further weakness if demand does not recover, but it is not yet showing the stress that typically accompanies deeper bear phases.
The most important principle is nuance. Bitcoin is not collapsing, but it is no longer behaving like an asset in a clean, momentum-driven expansion. The shift to moderate selling pressure, combined with a rare red year-end, signals that the market is moving into a more complex and selective phase rather than following the familiar cycle script.
Derivatives momentum is turning cautious as sell-side pressure increases
Adler’s analysis highlights a growing shift in short-term market behavior via the Bitcoin Net Taker Flow momentum metric, which tracks how aggressively traders are positioning themselves on the long or short side. Unlike cumulative flow, this indicator is designed to respond quickly to changes in sentiment, providing early insight into shifts in trading behavior rather than longer-term positioning.
In recent sessions, this momentum gauge has turned decisively. After maintaining positive ground at the end of December, the smoothed index has fallen to negative levels and is now hovering around -0.3. While this does not yet reflect extreme stress, it does place the market firmly in a moderate bearish pressure regime. The timing is notable: the momentum drop occurred alongside a deterioration in cumulative Net Taker Flow, reinforcing rather than contradicting the signal.
This coordination is important. When both the cumulative pressure and short-term momentum weaken together, it reduces the chance that the movement is caused by noise or isolated positioning. Instead, it points to a broader shift in traders’ aggression toward the sell side. Adler notes that there would be greater downside risk if momentum continues to weaken, especially if the numbers cross the -0.4 threshold.
Conditions indicate controlled but persistent selling pressure. Bitcoin is not yet in capitulation territory, but the synchronized signals indicate that bearish forces currently have the upper hand, increasing sensitivity to loss of price support.
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Bitcoin retains key support as momentum remains fragile
Bitcoin is consolidating around the $88,000-$90,000 zone after a sharp decline from its recent highs. This reflects a market caught between stabilization and continued downside risk. The price remains below the short- and medium-term moving averages, indicating that bullish momentum has not yet been regained.
The 50-period moving average has turned into dynamic resistance, while the 100-period average is leveling off. This reinforces the idea of a broader compression phase rather than an immediate trend reversal.
Importantly, Bitcoin is still well above the 200-period moving average, which continues to rise. This suggests that, from a higher temporal perspective, the broader structure has not yet been completely broken down. However, the region’s loss of between $100,000 and $105,000 previously marked a clear regime shift from expansion to distribution. Increasing sensitivity to sell-side pressure.
Volume has fallen significantly during the recent sideways move, indicating a lack of conviction among both buyers and sellers. This supports the view that the market is absorbing previous excesses rather than aggressively cutting prices. Still, repeated failures to get back above $92,000-$95,000 point to weak demand at higher levels.
Since Bitcoin has the support band of $85,000-$88,000, consolidation remains the dominant scenario. A breakdown below this area would likely open the door to deeper retracements.
Featured image of ChatGPT, chart from TradingView.com