BTC weekly volatility intensifies, institutional supply and demand competition amid technical correction (12.06-12.12 Weekly Analysis)

Market Overview: Repeated Fluctuations Between Peaks and Rapid Corrections

Last week, Bitcoin experienced a volatile week with swings exceeding $6,000. Fluctuating between $88,155 and $94,444, it vividly reflected market participants’ changing sentiments. Currently, BTC is consolidating around $92,605, with a supply-demand tension forming between institutions and miners.

Weekly Price Trends in Four Phases

Phase 1 - Support Break Down (December 6)

• US bond yields rebound and dollar strength exert pressure on risk assets
• Breakthrough of $90,000 support, recording lows of $88,155
• Fear-driven sell-offs intensify short-term downward momentum

Phase 2 - Sideways Consolidation at Lows (December 7-8)

• Cautious movements within $88,500-$89,800 range
• Technical oversold signals trigger low-price buying
• Market waits before entering critical support levels

Phase 3 - Bullish Rebound Breakthrough (December 9-10)

• Influenced by the Fed’s 25bp rate cut decision
• Strong breakout above resistance at $91,000-$93,000
• Peaks at $94,444, then retraces to around $92,000

Phase 4 - Peak Correction and Rapid Recovery (December 11-12)

• Selling pressure at highs pushes price down to $89,600
• Support strengthens, leading to rebound near $93,000
• Closes around $92,000 with sideways movement, seeking direction

Macroeconomic Background: Policy Shift and Institutional Confidence Restoration

Changes in Monetary Policy and Liquidity Environment

The US Federal Reserve has cut interest rates for the third consecutive time, lowering the benchmark rate by 25bp to 3.50%-3.75%. This decision signals a clear positive outlook for the crypto market. However, with only one rate cut expected in 2026, market reassessment is ongoing.

US Treasury yields rose to 4.17%, their highest since early October. Driven by inflation indicators and a strong employment market, paradoxically, bond market adjustments are increasing hedge demand for assets like Bitcoin.

Institutional Capital Flows

Turning Point in ETF Fund Flows This week, about $216 million flowed into Bitcoin spot ETFs, but the flows were highly volatile:

• Slight outflow early on: -$60.4 million on December 8
• Large institutional buy-in: +$151.9 million on December 9
• Peak inflow: +$223.5 million on December 10 — highest in 3 weeks
• Large redemption: -$154.2 million on December 11

Verid and Fidelity’s FBTC led the inflows, especially on the 10th, with over $200 million in a single day. Experts interpret this as “product rotation” rather than a loss of confidence in crypto ETFs overall.

( Regulatory Clarity and Mainstream Adoption Progress

UK: Official Recognition of Cryptocurrencies as Private Property The UK government has included cryptocurrencies and NFTs within traditional private property categories. This is more than nominal; it provides a legal foundation, lowering institutional entry barriers and boosting international capital trust.

UAE: Central Bank Regulatory Framework Federal Law No. 6 mandates all crypto-related businesses to obtain approval from the Central Bank. Operating without a license can incur fines up to $272 million, but existing businesses are granted a compliance grace period until September 2026. This signals industry normalization through regulation.

US: Challenges and Progress in Crypto Legislation Senator Morano expressed disappointment with ongoing crypto market structure negotiations, mentioning a hearing on December 17-18. Meanwhile, the NDAA (National Defense Authorization Act) surprisingly did not include a CBDC ban, displeasing conservative factions. Although regulatory pathways remain complex, negotiations continue.

) Observation of China’s Crypto Policy Environment

JP Morgan upgraded China assets to “Overweight,” highlighting regulatory trends in Asia. Increased regulation in mining-centric countries like Paraguay (tracking info and energy use), and clearer frameworks in UAE and UK, indicate a shift toward more regulated ecosystems globally. Policy changes in major economies, including China, will significantly influence future crypto acceptance.

Technical Outlook: RSI Normalization and Moving Averages Reconfiguration

( RSI Indicator Signals

Weekend RSI at 49.51, recovering from the previous weeks’ oversold levels near 30, indicating:

• Technical correction from excessive declines
• Temporary easing of selling pressure
• A balance between buying and selling forces

) Moving Averages Analysis

Current price ($92,605) relative to moving averages:

Analysis: Short-term technical pressure has eased, but medium-term trend remains in correction. To confirm a genuine recovery, a break above $100,000 is necessary.

( Key Support and Resistance Levels

• Support: $88,000-$90,000 (multiple bounce points)
• Intermediate Resistance: $94,000 (multiple highs)
• Upper Target: $100,000 (psychological resistance)
• Extreme Bear Scenario: below $80,000

Last week’s data indicates that $94,000 is a critical threshold for either breakthrough or re-dip. Successful breakout could challenge $100,000; failure may lead to retesting $88,000.

Futures and Options Market Sentiment

) Caution in Derivatives Market

• Perpetual Futures Funding Rate: Slightly negative, near zero
• Funding Rate: Neutral
• Open Interest: No significant restructuring
• Leverage Interest: Limited

This suggests traders are adopting balanced or defensive positions. Low derivatives activity means price discovery relies more on spot liquidity and macro catalysts.

( Volatility Accumulation in Options Market

Delta-20 call options’ short-term maturities increased volatility by about 10 points compared to last week. Long-term contracts remain relatively stable. Traders are accumulating volatility near key levels )$94,000 and $100,000###, indicating potential imminent volatility explosion.

Mining Ecosystem: Structural Growth Under Pressure

( Hash Rate Trends and Mining Difficulty

Network Hash Rate: 854.24 EH/s (low) to 1,285.30 EH/s (high) range Weekend Hash Rate: 1.09 ZH/s (very high) Mining Difficulty: 148.20 T, next adjustment on Dec 24 (+0.45% expected))

Hash rate declined with price correction but rebounded quickly with price recovery. On the 8th, it reached near 1.36 ZH/s, demonstrating resilience.

Miner Profitability Deterioration

Hash Price ( Daily revenue per hash rate unit:

• Weekly high: $39.85/PH/s/day on Dec 10
• Weekly low: $37.41/PH/s/day on Dec 7
• Weekend: $39.24/PH/s/day

Hash price is driven by BTC price and on-chain activity. Recent BTC correction and declining on-chain demand have challenged miner revenues. Meanwhile, rising hash rate compresses profit margins per hash unit.

) Structural Changes in Mining Industry

• Mining Equipment Recovery Period: Lengthening
• Funding Costs: Rising
• Major Miners’ Strategies: Accelerating deployment in AI and HPC (High-Performance Computing)
• Industry Focus: Efficiency optimization, cost control, diversification

Despite this, record-high hash rates and renewed institutional interest indicate ongoing structural growth opportunities.

Miner vs. Large Investor Supply-Demand Tension

On-chain analysis shows a structure of:

Miners:

• Continuous selling to cover operational costs
• Still acting as marginal sellers in the short term
• Providing ongoing supply at highs

Whales and Institutions:

• Clear buying and absorption around $90,000
• Sustained buying at key support levels

Implication: Even with miner selling, institutional buying absorption could prevent a “cliff” drop like in November, favoring sideways consolidation with time-space exchange.

Market Sentiment: From Extreme Fear to Hesitation

Fear and Greed Index Trends

Current Status: Still in fear zone (29 points), but clearly recovering from previous extreme fear levels near 10-20.

Significance:

• Panic selling phase is ending
• Investor psychology shifting from fear to hesitation
• Presence of fear itself indicates potential for rebound
• Strong positive news or capital inflows could enhance psychological resilience

Institutional Capital Entry and Major News

Accelerated Bitcoin Accumulation by Listed Companies

Last week’s major corporate holdings:

1. MicroStrategy: Added 10,624 BTC (Total 660,624 BTC)

   • Investment: approx. $962.7 million
   • Avg price: $90,615 each

2. Twenty One Capital: Added 441.25 BTC (Recent 7 days)

   • Holdings: 43,514.12 BTC
   • Supported by Tether and SoftBank

3. Other Major Holders:

   • Canaan Technology: +100 BTC (Total 1,730 BTC)
   • American Bitcoin Corp.: +416 BTC ###Total 4,783 BTC###
   • ProCap Financial: Surpassed 5,000 BTC
   • BNB Plus: +3,349 BNB (Total 18,840 BNB)

This collective buying reflects growing institutional confidence.

Mainstream Finance Incorporates Crypto Assets

Bank of America: Starting January 2026, will recommend crypto ETFs and products to asset management clients. This marks a shift from mere trading to formal investment allocation tools.

( Market Outlook and Analyst Opinions

JP Morgan: Predicts Bitcoin’s trading trend similar to gold, potentially reaching $170,000 next year.

21Shares 2026 Outlook Highlights:

• Bitcoin transitions from a 4-year cycle to a mature macro asset
• Global crypto ETP assets under management: $250 billion to $400 billion
• Stablecoin supply: $30 billion to $100 billion
• Real-world assets (RWA) total locked value: $35 billion to over $500 billion

Chinese Analyst Banpo: “Bitcoin is expected to rise to $103,500-$112,500 within the next month, but the process will remain volatile,” he said.

Conclusion: Turning Point from Correction to Recovery

Last week, Bitcoin’s volatility over $6,000 revealed rapid shifts in market sentiment. However, detailed analysis confirms several positive signals:

1. Institutional Accumulation at Low Prices: ETF inflows and corporate Bitcoin purchases continue
2. Regulatory Clarity: UK, UAE, and other key regions are integrating crypto into legal frameworks
3. Psychological Stabilization: Transition from extreme fear to hesitation suggests approaching bottom
4. Macroe Environment Improvement: Rate cuts and liquidity expectations favor risk assets
5. Mining Ecosystem Resilience: Hash rate hitting new records indicates structural growth

In the short term, $94,000 and $100,000 are key resistance levels, but medium-term outlook favors recovery driven by institutional buying and regulatory clarity. The current BTC price at $92,720 is seen as an initial rebound after correction, with expectations of rising toward $103,500-$112,500 within the next month.