Bitcoin’s unusually weak performance this Q4 has fueled a wide range of explanations, especially since the final quarter of the year is typically a strong period for BTC. Instead of showing strength, Bitcoin has lagged behind major assets and equity indices. Gold has outperformed it nearly sixfold, gaining around 60 percent year to date compared to Bitcoin’s 10 percent. BTC has also trailed the S&P 500 and Nasdaq Composite, and its sharp divergence from equities in October triggered renewed debate about what is really weighing on the market.
Much of the initial blame fell on whale selling, particularly from early Bitcoin holders who accumulated their coins when BTC was still below 10,000 dollars. On chain data supports the fact that long term holders have been offloading since July. However, analyst PlanB challenged the narrative, arguing that the selling pressure actually came from 2024 buyers who entered at the 60,000 to 70,000 dollar range. Another theory circulating in the market described the situation as a “BTC IPO moment,” suggesting a mature phase of distribution where older whales pass supply to ETFs and corporate treasuries before the market climbs again.
Fidelity added a different viewpoint to the discussion. Chris Kuiper, VP of Research at Fidelity’s Digital Assets division, stated that year end tax planning and rotation into more appealing opportunities are the primary forces behind the recent weakness. According to Kuiper, many long term holders are locking in gains and adjusting their positions for tax purposes, which naturally increases sell side activity. He added that seller exhaustion has not yet been reached, referencing the Supply Active metric, which tends to drop during bull markets as whales distribute and rise during bearish periods.
In the short term, analyst Willy Woo highlighted liquidity stress as another headwind, noting that a stronger US dollar has created risk off sentiment across markets. When the dollar index strengthens, investors tend to seek safety, putting pressure on Bitcoin and other risk assets. Woo pointed out that although the dollar loses value over long time horizons, it still functions as a safe haven in the current environment.
Macro analysts believe that the resolution of the US government shutdown could provide a lift for liquidity and offer some short term relief. Whether that shift is enough to spark a broader recovery will depend on how quickly selling pressure from long term holders fades and whether buyers regain confidence heading into the final stretch of the year.
