Bitcoin's Path to $95,000: Is the Bullish Case Strengthening?

The cryptocurrency market has long been a theater of extremes, where optimism and pessimism collide in volatile cycles. As Bitcoin enters the final stretch of 2025, the question of whether it can reclaim its $95,000 threshold-and beyond-hinges on a nuanced interplay of structural market improvements and evolving on-chain sentiment. While macroeconomic headwinds persist, a closer examination of on-chain metrics reveals a market recalibrating for a potential resurgence.

Structural Improvements: A Foundation for Renewed Optimism

Declining Unrealized Losses and Market Absorption
Bitcoin's recent correction from a peak of $126,000 to lows near $80,000 in late 2025 has left a trail of unrealized losses. However, the market's ability to absorb these losses without triggering cascading sell-offs suggests a maturing ecosystem. For instance, one institutional holder reported a $17.44 billion unrealized loss in Q4 2025, yet this did not translate into systemic distress. Instead, the decline appears to have shifted pain to new entrants, with long-term holders (LTHs) completing a third wave of distribution that has brought their supply to an eight-month low of 14.34 million BTC. This multi-phase selling pattern diverges from historical norms, where LTHs typically offload in a single concentrated period, indicating a more measured and sustainable market dynamic.

Reduced Forced Selling and Derivatives Market Reset
The derivatives market, once a source of volatility, has shown signs of stabilization. Futures open interest has fallen over 40% from its October 2025 peak, signaling a reduction in speculative leverage. This decline in forced liquidations- coupled with a 30D-SMA Entity-Adjusted Realized Loss of $555 million per day-suggests that the market is cleansing overextended positions. While this reset may seem bearish in the short term, it creates a cleaner slate for 2026, where renewed liquidity could drive a more orderly price discovery process.

Stabilizing Long-Term Holder Behavior
LTH activity remains a critical barometer of structural health. Despite a net position decline of 1.78 million BTC since July 2025, the recent absorption of LTH selling by short-term holders (STHs)-who have accumulated 1.8 million BTC- reflects a shift typical of late-cycle bull markets. This rotation from long-term to short-term holders, while increasing near-term fragility, also indicates that capital is being recycled rather than withdrawn entirely. Crucially, LTHs have not abandoned the market entirely; their distribution appears strategic, not panic-driven, as evidenced by the gradual nature of their net position change.

Lingering Macro Risks and Volatility

Despite these structural improvements, Bitcoin remains vulnerable to macroeconomic headwinds. ETF flows have turned negative, with the 3-day average of net inflows consistently below zero-a stark contrast to the robust inflow regime earlier in 2025. Spot liquidity has also weakened, with Bitcoin's relative volume near the lower bound of its 30-day range. Meanwhile, the Federal Reserve's upcoming FOMC meeting looms as a wildcard, with options markets pricing in a 11% 25-delta skew for downside protection in the one-week tenor. These factors underscore a market that, while structurally stronger, remains anchored in a fragile equilibrium.

Strategic Implications for Investors

For investors, the path to $95,000 hinges on two key questions: Will liquidity improve to offset persistent sell pressure from top buyers? And can the market sustain its current trajectory without renewed macroeconomic shocks? The answer lies in the interplay of structural resilience and external catalysts.

The reduction in forced liquidations and the stabilization of LTH behavior create a more sustainable bullish environment. However, the absence of robust ETF inflows and the fragility of spot liquidity mean that any upward move will likely be met with resistance. A strategic approach would involve selective entry into Bitcoin at current levels, with a focus on capital preservation and hedging against macroeconomic volatility. Options strategies-such as buying downside protection through 25-delta puts-could provide a buffer against near-term shocks while allowing exposure to a potential 2026 rebound.

Conclusion

Bitcoin's journey to $95,000 is not a straight line but a mosaic of structural improvements and persistent challenges. The market's ability to absorb unrealized losses, reduce forced selling, and stabilize LTH behavior suggests a foundation for renewed optimism. Yet, the absence of robust liquidity and the looming macroeconomic risks mean that caution remains warranted. For investors with a medium-term horizon, the current environment offers a unique opportunity to position for a potential 2026 upcycle-provided they navigate the near-term turbulence with discipline and foresight.