BitcoinMarkets
|5 min ReadBitcoin’s Calm Masks Holder Selling and Fed Risk
Lucca Menezes
Senior Analyst
Published
Jan 16, 2026
A weekend rebound, then overhead supply
Bitcoin bounced off the lower edge of the top buyers’ supply cluster from 118K, tagged the midline near 113K. It looks like the post-ATH relief bounces of Q2 to Q3 2024 and Q1 2025. Rallies appear, then overhead supply eats them. Long-term holders keep selling into strength and cap momentum. That is classic late-cycle behavior. Demand is there, but not dominant. Everybody knows that shelf above spot is crowded.
The 88K line in the sand
After the bounce, price briefly reclaimed the short-term holders’ cost basis near 88K. That level reflects the cost basis of actively circulating supply and has marked deeper corrective phases in prior cycles. It is where real bargain hunters fight.
Short-term stress, long-term distribution, real sell flow
Short-term holders are feeling the heat first. Many top buyers are now exiting at a loss. During the drawdown to 107K to $117K cluster, the market stays in balance. Not full capitulation. Time still chips away at bull conviction.
Long-term holders remain heavy distributors. The Long-Term Holder Net Position Change sits near −104K BTC per month, the largest wave of distribution since mid-July. That is seasoned money taking profits into soft demand. Markets rarely expand with that backdrop. You want to see that number flip positive to rebuild resilience.
Follow the coins. Transfer Volume from LTHs to Exchanges on a 30-day average has surged to about 100M to $125M baseline since November 2024. That is consistent sell-side flow, a lot like August 2024 when heated spending met slowing momentum. Until this pipeline cools, spot demand will struggle to soak it up. Price action stays heavy.
Options shift from panic to patience
Volatility pressure at the front end is easing. Thirty-day realized volatility sits at 42.6 percent, down from 44 percent last week. Implied volatility fell faster as traders unwound crash hedges. One-week at-the-money IV dropped more than 10 vol points to about 40 percent. One- to six-month tenors slipped only 1 to 2 points and hover in the mid-40s. The term structure flattened. Fewer near-term shocks are priced. A gentle grind higher toward roughly 45 percent is the base case, not a fresh panic.
Skew tells the same story. After the 10 October washout, one-week 25-delta skew spiked above 20 percent as everyone paid up for puts. It has since collapsed toward neutral, with only a small rebound. One- and three-month skews also reset, now showing only a modest put premium. A lot of crash protection came off. Positioning looks two-sided and mildly bullish. Calm, controlled, almost beautiful.
Upside interest is selective and smart. Around the 120K, call premium sold outweighs buying, turning net negative. That looks like call spreads. Participate in a moderate rally, finance it by selling higher strikes. Not a full breakout bet. A practical, tremendous stance for range markets.
Hedges for shallow dips, eyes on the Fed
On the put side since 24 October, traders have bought 105K puts. That prices controlled pullbacks. Hedge the shallow dip, collect premium deeper down. The read is simple. Consolidation near current levels is plausible. A full breakdown below $105K looks less likely. The worst of October’s deleveraging may be behind us. Range trading and vol harvesting beat panic hedging.
The on-chain story still says recalibration. Bitcoin cannot hold above the short-term holders’ cost basis with conviction. Long-term holders continue to distribute at scale. Transfers to exchanges run hot. To rebuild durable strength, that cohort must flip to accumulation. Until then, upside stays constrained.
One big catalyst remains in focus. The Federal Reserve meeting. A rate cut is mostly priced. A dovish tone likely keeps volatility subdued and skew balanced. A smaller cut or a hawkish surprise would reprice short-dated IV higher and widen 25-delta skew as traders rush for protection. The calm is real, and it is fragile. If the Fed sticks to expectations, Bitcoin gets a cleaner runway. If not, we will find out how strong that 118K shelf really is.
Disclaimer: This document is intended for informational and entertainment purposes only. The views expressed in this document are not, and should not be taken as, investment advice or recommendations. Recipients should do their own due diligence, taking into account their specific financial circumstances, investment objectives and risk tolerance, which are not considered here, before investing. This document is not an offer, or the solicitation of an offer, to buy or sell any of the assets mentioned.