Bitcoin [BTC] 2025 officially ended with an annual loss of 6.2%, underperforming other asset classes such as gold and the S&P 500, which posted gains of 62% and 16% respectively.
There is a growing sense of this ahead of the rebalancing of key players in the new year caution and bearish sentiment. Hedging activity also surged as Bitcoin’s downside protection hit a range of $75,000-$80,000 in January.
But Bo Hines, Tether’s strategic advisor and former White House director of digital assets, warned is against shorting BTC in 2026.
“Anyone who is bearish on Bitcoin heading into 2026 is foolish.”
The likely passage of the crypto market structure bill and the appointment of the new Fed chairman are seen as bullish catalysts for 2026.
Even the short-term price action indicated a potential bottom, but the medium-term outlook remained mixed for the crypto asset.
Has Bitcoin really bottomed out?
From an on-chain perspective, the BTC bottoming process was underway, thus analyst Frank Fetter.
Frank mentioned the short-term easing of the supply ratio and the recovery towards break-even, which marked a trough.
Source: Checkonchain
The first sign of potential would be a definitive recovery of the price realized by STH, which at the time of writing was $87.5K. This would reduce the panic sell-off at a loss by STH or investors who have held BTC for less than five months.
However, institutional inflow has not stabilized. The US spot ETFs attracted $355 million in daily net inflows on December 30.
This was the first time that there was an inflow after seven consecutive days of outflow. But the trend was reversed again after another $348 million outflow on New Year’s Eve.
Collectively, demand for BTC, including that of BTC government bonds, has fallen significantly and could turn negative if the contraction continues. warned Julio Moreno, head of research at CryptoQuant.
Such a negative reversal would lower the BTC price.
Source: CryptoQuant
Meanwhile, it is unclear whether the crypto asset will maintain and expand its current price range of $85K-$90K in the near term.
In the medium to long term, analyst projections are mixed, with bulls like Grayscale and Bitwise calling for a new all-time high in 2026.
On the other hand, Galaxy Research and other analysts have taken a conservative and cautious stance, noting that 2026 may be too “too”chaotic to predict.”
Final thoughts
- The former White House expressed a positive outlook for BTC in 2026 and downplayed the bears as “foolish.”
- Although the bottoming phase was still ongoing, the demand front did not indicate a likely reversal in the short term.