Points of Focus

• Santiment shows rising funding rates near $90K, signaling crowded longs and liquidation risk.
• Institutional buying is being offset by selling from Asian exchanges driven by OG holders and miner capitulation.
• An 8% hash rate drop linked to China mining pressure is forcing miners to sell BTC regardless of price.

Bitcoin’s failure to hold above $90,000 despite continued institutional accumulation is increasingly being linked to rising leverage and structural selling pressure, according to on-chain analysts at Santiment (a crypto research and data intelligence platform).

Data from Santiment shows that Bitcoin’s recent push toward the $90,000 level was accompanied by a sharp rise in positive funding rates across major derivatives exchanges, signaling an increase in leveraged long positions. Historically, such conditions have often preceded periods of heightened volatility, forced liquidations, and short-term price pullbacks.

😮 Bitcoin saw an enormous jump to ~$90,087 on @coinbase 2 hours ago before quickly sliding back to its current ~$86,580 market value. Bitcoin’s rising positive funding rates on exchanges signals more leveraged long positions, which historically has led to sharp liquidations and… pic.twitter.com/JOmk3eNnCW

— Santiment (@santimentfeed) December 17, 2025

While Bitcoin’s fundamentals remain intact, Santiment analysts note that crowded long positioning can distort price action, particularly when external sources of supply enter the market. This dynamic helps explain why Bitcoin has continued to trend lower even as institutions report multi-billion-dollar BTC purchases.

Broader market pressures weigh on BTC

The current price environment reflects several macro and structural influences that go beyond short-term sentiment:

• China’s mining pressure re-emergence: Recent enforcement actions targeting mining operations in regions like Xinjiang have abruptly taken tens of thousands of rigs offline, contributing to an approximately 8% drop in Bitcoin’s hashrate. Miners cut revenue streams and, in some cases, liquidate BTC holdings to cover costs, introducing short-term selling pressure into the market.
• Institutional flows remain mixed: Despite continued interest from institutional buyers, with some data showing institutional Bitcoin buys outpacing daily mining output for the first time in weeks, supply-side selling from miners and other holders has muted rally attempts.
• Global market dynamics: Analysts note that Bitcoin’s broader correction in Q4 2025 has been influenced by macroeconomic volatility, technical factors, such as leveraged position unwinds, and regional selling disparities, even as long-term adoption narratives continue. 

Regional selling and structural supply dynamics

According to Bull Theory, a regional divergence in Bitcoin flows as a key force behind the persistent weakness, even during phases of robust institutional accumulation:

• OG holders distributing: Early Bitcoin holders, particularly those based in Asia, have increased distributions in recent weeks, likely anticipating mining-related pressures or broader market rotation. On-chain metrics reportedly show elevated long-term holder selling.
• Miners under stress: When mining rigs are forced offline or become unprofitable, operators often sell BTC reserves to maintain operations or relocate infrastructure, a form of forced selling that is largely independent of broader market sentiment.
• Flow divergence by geography: Bull Theory notes that Asian-centric exchanges have exhibited consistent net spot selling, while platforms reflecting more U.S. flows, notably Coinbase, show ongoing net buying, highlighting a key regional imbalance in supply and demand.

WHY IS BITCOIN STILL DUMPING WHILE INSTITUTIONS ARE MAKING BILLION DOLLAR BUYS?

Bitcoin is not going down because fundamentals are weak.

It is going down because selling pressure is stronger and coming from deeper sources.

One major reason is China’s mining crackdown coming… pic.twitter.com/QBAG8PKAKh

— Bull Theory (@BullTheoryio) December 17, 2025

This interplay helps explain why BTC can weaken even as institutions continue to deploy capital: significant selling pressure from miners and legacy holders can outweigh inflows when liquidity is concentrated in the most active trading venues.

What it means going forward

Santiment’s leverage metrics suggest that funding rates must retreat toward neutral or negative levels before the market can confidently resume an upward trajectory toward key psychological levels like $100,000. Until then, the combination of leveraged positions and structural selling risk may continue to cap upside and amplify volatility.

Analysts stress that this dynamic doesn’t signal a breakdown in Bitcoin’s fundamentals; institutional demand and macro adoption narratives remain intact, but rather this highlights the complex supply-demand forces in play during this phase of the crypto cycle.