- Bitcoin holders with 1-3 month holdings shifted from a 25% profit in May to a 25% loss in December 2025.
- A price move above $93,321 could trigger liquidation of about $570 million in leveraged short positions.
- Options market data shows declining demand for downside protection, signaling cautious optimism.
- Short squeezes from forced buying may accelerate Bitcoin’s price recovery.
Short-term holders of Bitcoin, defined as investors holding the cryptocurrency for one to three months, have experienced a significant change in fortunes between May and December 2025. Their aggregate profit and loss switched from a 25% gain in mid-May to a 25% loss by early December, indicating a wave of selling as weaker holders exit positions. According to CryptoQuant analyst DarkFrost, this shakeout often corresponds with market bottoms and presents opportunities for accumulation.
Bitcoin encountered resistance near $93,000 last week but attempted to break above this level again recently. Data from Glassnode noted the emergence of large clusters of short position liquidations, which result from traders forced to buy back their short positions, adding buying pressure and potentially fueling upward momentum, as mentioned in Glassnode’s analysis. Following a 7.4% price increase within 24 hours, Bitcoin traded at approximately $93,330.
A breakthrough above $93,321 could liquidate nearly $570 million worth of short positions built over the previous week, data from CoinGlass shows. This liquidation process, called a short squeeze, occurs when price moves against short sellers, compelling them to cover losses by purchasing the asset, thus intensifying price gains.
Options market data also reflects changing sentiment. The 7-day 25-delta options skew improved from -10% to -4% between November 30 and December 3, indicating reduced demand for put options — financial contracts used as downside protection or bearish bets. A similar, though milder, shift was observed in the 30-day skew, based on data from Deribit. Adam Chu, chief researcher at GreeksLive, stated that this trend signals a rebound and cited the end of the Federal Reserve’s quantitative tightening and the increasing likelihood of rate cuts as factors that could bring liquidity back to risk assets, including crypto.
Overall, the exit of short-term holders has likely removed a source of selling pressure. If Bitcoin sustains a price above $93,000, it could trigger a swift rally as short sellers cover positions and buying momentum increases. Users in prediction markets also reflect optimism, assigning an 80% probability that Bitcoin’s next major movement will lead to $100,000 rather than dropping to $69,000, as seen on Myriad Markets.
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