Bitcoin closed the year 2025 slightly in the red, marking a rare break in the long-observed four-year cycle pattern of one red year followed by three green years. The annual decline was modest—around 6%—and negligible compared to historical drawdowns. However, the red close carries symbolic weight, suggesting a shift in market behavior.
Recent on-chain analysis from Axel Adler shows that aggressive buying peaked around the New Year before fading. Since then, the balance of market aggression has tilted toward sellers, though not in an extreme way. The cumulative Net Taker Flow indicator currently sits in a moderate negative range, signaling increased sell-side pressure but remaining far from capitulation levels. Historically, similar conditions have coincided with heightened downside sensitivity rather than immediate trend reversals.
Adler's analysis of the Bitcoin Net Taker Flow momentum metric, which tracks short-term trader positioning, shows a decisive rollover. After holding positive territory in late December, the smoothed reading has slipped into negative levels, now hovering around -0.3. This places the market in a moderate bearish pressure regime. The timing is notable as the momentum downturn occurred alongside a deterioration in cumulative Net Taker Flow, reinforcing the signal. Adler notes that deeper downside risk would emerge if momentum continues to weaken, particularly if readings push beyond the -0.4 threshold.
Bitcoin is currently consolidating around the $88,000–$90,000 zone after a sharp pullback from recent highs. Price remains below short-term and medium-term moving averages, with the 50-period moving average acting as dynamic resistance. The 100-period average is flattening, reinforcing the idea of a broader compression phase. Importantly, Bitcoin is still holding well above the 200-period moving average, which continues to slope upward, suggesting the broader structure has not fully broken down. However, the loss of the $100,000–$105,000 region earlier marked a clear regime shift from expansion to distribution.
Volume has notably declined during recent sideways movement, indicating a lack of conviction from both buyers and sellers. This supports the view that the market is digesting prior excesses. Repeated failures to push back above the $92,000–$95,000 range highlight weak demand at higher levels. As Bitcoin holds the $85,000–$88,000 support band, consolidation remains the dominant scenario. A breakdown below this area would likely open the door to deeper retracements.
This range-bound behavior aligns with broader market dynamics. Despite crypto's reputation for volatility, markets spend most of their time ranging due to structural features like liquidity cycles, leverage resets, and value discovery. Market auction theory suggests that once buyers and sellers reach a temporary agreement on price, trading activity compresses, forming a value area. Price naturally rotates within that range until a new catalyst forces a reassessment.
Heavy use of leverage in crypto markets also contributes to range-bound conditions. As trends develop, leveraged positions build rapidly, eventually triggering liquidations that abruptly halt directional movement. These leverage resets are recurring structural events that force price into consolidation. Additionally, growing institutional participation reinforces range-bound conditions, as large participants prefer stable environments where they can accumulate or distribute positions gradually without causing excessive slippage.
