Can Bitcoin's Short-Liquidity Squeeze and Bear Trap Dynamics Signal a Path to $100K?

Bitcoin's price action in late 2025 has been a rollercoaster, marked by a dramatic $120,000-to-$80,000 correction in November and a subsequent stabilization around $86,500. Amid this volatility, on-chain accumulation metrics and macroeconomic dynamics are painting a nuanced picture of resilience and potential. This analysis explores whether the current liquidity squeeze and bear trap dynamics could catalyze a path to $100,000, leveraging on-chain data and macro-driven bullish momentum.

On-Chain Accumulation: A Tale of Resilience

Bitcoin's on-chain metrics reveal a market in late bull phase but not yet euphoric. Exchange outflows have reached their lowest levels since early 2023, with major platforms like Binance seeing a 51,000 BTC withdrawal between April and May 2025. This trend underscores a shift toward long-term holding, as institutional and whale actors move assets to cold storage, tightening spot market liquidity.

Miner activity further reinforces this narrative. Global hashrate records and declining miner outflows signal a tightening supply environment, with miners prioritizing accumulation over selling. The Puell Multiple, a gauge of miner profitability relative to a 365-day average, remains neutral at 1.1, indicating that selling pressure is not yet excessive. Meanwhile, the MVRV Z-Score (2.4–2.6) suggests moderate overheating but remains below historical peaks seen in 2013, 2017, and 2021, leaving room for further gains before reaching extreme valuations.

Wallet growth among long-term holders has also remained robust, with $900 billion in realized capitalization and SOPR (Spent Output Profit Ratio) near breakeven. This indicates selective profit-taking without widespread panic selling, a critical sign of market health.

Macro-Driven Bullish Momentum: Fed Policy and Institutional Adoption

The Federal Reserve's December 2025 policy outlook is a pivotal factor. Markets now price in a near-90% chance of a 25 basis point rate cut, driven by dovish signals from officials like John Williams and the anticipated nomination of Kevin Hassett, a proponent of lower rates. Historical precedents show that Fed pauses or dovish surprises often trigger Bitcoin rallies, as lower interest rates improve liquidity and risk-on sentiment.

Institutional adoption has also reached a critical inflection point. By Q2 2025, 59% of institutional investors allocated over 10% of their AUM to Bitcoin, driven by the approval of spot ETFs like BlackRock's IBIT, which amassed $65 billion in AUM. Regulatory clarity, including the U.S. Financial Accounting Standards Board's ASU 2023-08, has normalized Bitcoin's treatment as a mark-to-market asset, removing accounting barriers for institutional balance sheets. Sovereign entities, including Norway's sovereign wealth fund, have increased Bitcoin holdings by 150% year-on-year, treating it as a legitimate reserve asset.

Despite November's $3.79 billion ETF outflows-driven by macroeconomic uncertainty and capital rotation into altcoins-the market has shown signs of stabilization. A $70 million inflow in early December and Texas's historic $10 million Bitcoin purchase via the IBIT ETF signal cautious optimism.

Bear Trap Dynamics and the Path to $100K

The November crash, fueled by shifting Fed expectations, rising Japanese yields, and the U.S. government shutdown, created a liquidity vacuum. However, Bitcoin's defense of the $86,500 support level and the Fed's dovish pivot suggest a potential bear trap scenario. If the December rate cut materializes and institutional accumulation outpaces selling pressure, the market could reorient toward a bullish trend.

Key risks remain, including macroeconomic volatility and ETF outflows. Yet, the interplay of on-chain accumulation and macro-driven factors-such as institutional adoption, regulatory normalization, and Fed easing-creates a compelling case for a rebound. Historical correlations show that every $1 billion in ETF outflows correlates to a 3.4% price decline, but the current outflow cycle appears to be stabilizing.

Conclusion: A Calculated Bet on Resilience

Bitcoin's path to $100,000 hinges on the convergence of on-chain strength and macroeconomic clarity. While the short-term liquidity squeeze and bear trap dynamics reflect market fragility, the underlying fundamentals-robust wallet growth, tightening supply, and institutional adoption-suggest a resilient foundation. If the Fed delivers a dovish surprise in December and institutional flows stabilize, Bitcoin could retest $97,000 and eventually reclaim $100,000 as a new psychological benchmark.

Investors must remain cautious, however. The market's sensitivity to macroeconomic shifts and ETF flows means volatility will persist. But for those who see the current dynamics as a buying opportunity, the alignment of on-chain and macro factors offers a compelling case for optimism.