The close of 2025 was brutal for Bitcoin. In just six weeks, over $1.2 trillion in value vanished from the crypto market. Bitcoin dropped more than 30 percent, falling below $82,000 amid a severe liquidity crunch. Leveraged positions were liquidated, ETFs faced outflows and passive funds pulled capital simultaneously.
Now, the mood has shifted. The panic has eased, leaving a leaner, more resilient market. Bitcoin’s price is gradually climbing, supported this time by a stronger underlying foundation.
Farah Mourad, market analyst at IG, says the outlook isn’t unanimous, but most serious forecasts now sit in the $120,000-$170,000 range. The outlook is based on ETF flows, constrained supply and improved liquidity conditions.
“Fundstrat is more aggressive, pushing $400K+. JPMorgan’s volatility-adjusted gold model suggests $170K is in play if Bitcoin continues to attract capital the way commodities do (especially gold). But few are pricing in euphoria. Most are looking at this as a grind upward,” she adds.
Post-halving effects and macro tailwinds shape Bitcoin’s path
The recent shakeout wasn’t driven by retail fear; it was purely mechanical. $19 billion in liquidations was reported in a single day, marking the largest in crypto history. Coupled with institutional de-risking, the market had virtually no cushion.
Meanwhile, many major central banks are approaching the end of their tightening cycles. Inflation is cooling, growth is slowing and rate cuts are already in motion. Historically, Bitcoin tends to thrive in such environments, as easier liquidity and falling interest rates reduce the opportunity cost of holding a non-yielding asset like BTC.
The post-2024 halving effects are now fully shaping the market. Miners are earning half the rewards they once did, leading many to scale back or consolidate operations. At the same time, CryptoQuant reports that exchange reserves are at their lowest levels since 2018. Bitcoin simply isn’t moving as freely as before.
“A lot of BTC is now effectively out of circulation and locked in long-term wallets, ETFs, corporate treasuries. We can see it in the on-chain data: the active supply is thin, it isn’t a supply shock yet, but it’s close,” Mourad added.
Over $50 billion flow into spot Bitcoin ETFs
ETF inflows slowed in the final quarter of 2025, but they didn’t collapse, marking a notable shift from previous cycles. Over $50 billion flowed into spot Bitcoin ETFs over the past year, and most of that capital remains in place. Allocators are increasingly treating BTC as a long-term asset rather than a short-term trade.
Meanwhile, Strategy still holds over 430,000 BTC and recently raised $1.4 billion in cash. As JPMorgan noted, if they aren’t forced to sell and their market new asset value (mNAV), a metric used to value crypto treasury companies, stays above 1, they effectively act as a market backstop.
Factor in the pending MSCI ruling in January, which could determine whether crypto-heavy firms remain in major indices, and the market’s structural resilience becomes clear.
“ETF outflows could return fast if macro flips again. The Bybit hack reminded everyone that the security layer still isn’t foolproof. Decrypt reported $1.4 billion lost to a hot wallet exploit. And if MSCI excludes firms like Strategy, $2.8 bllion in passive outflows could hit the tape fast,” Mourad added.
Read: Crypto whales control $550 million market swings in 2025
Bitcoin could remain under pressure through mid-2026
From the 2022 lows of $16,500 to the 2025 peak near $126,000, Bitcoin appears to have completed a five-wave rally according to the Elliott Wave theory. If that’s accurate, the year-end drop below $108,000 may mark the start of a deeper corrective phase.
In Elliott Wave terms, corrections after a five-wave advance typically unfold in three parts: an initial decline, a rebound and a more substantial pullback. If this pattern plays out, Bitcoin could remain under pressure through mid-2026. Key support zones to watch during the potential downtrend are $84,000, $70,000 and $58,000, levels where past cycles have historically found buying interest.
As Bitcoin enters 2026, the market shows real structural support: liquidity is improving, supply remains constrained and institutional demand is still present. These factors could sustain strength if they persist.
At the same time, the recent pullback and a potentially completed five-wave rally suggest a longer corrective phase is possible. Whether the cycle has one final leg up or has already peaked, the next chapter is likely to be driven more by market mechanics than by pure momentum.
