Bitcoin Bullish Signals Emerge Despite December Volatility

Bitcoin concluded a turbulent 2024 with significant volatility in December, recording a price drop of nearly 9%. This movement pushed volatility to highs not observed since April 2025. However, a new analysis suggests the market may be shifting toward a more optimistic phase.

According to the latest mid-December 'ChainCheck' report, liquidity conditions are improving, and speculative leverage is resetting. These factors provide a foundation for cautious optimism among long-term holders. The report highlights a distinct contrast in behavior between different investor classes, suggesting a maturation of the market structure.

Key takeaways from the analysis include:

• Significant accumulation by corporate entities known as Digital Asset Treasuries (DATs).
• A reduction in exposure from exchange-traded product (ETP) investors.
• Potential bullish contrarian signals from declining network hash rates.

The market has displayed contrasting behaviors between retail and institutional participants. Digital Asset Treasuries (DATs) have been actively buying the dip, accumulating 42,000 BTC during the downturn. This represents their largest addition since July and has pushed aggregate holdings above the one million BTC mark.

This accumulation stands in sharp contrast to the behavior of Bitcoin exchange-traded product (ETP) investors, who have reduced their exposure. This divergence underscores a strategic shift toward corporate accumulation over retail-led speculation. Analysts noted that some DATs are exploring alternative financing methods to fund these purchases, including issuing preferred shares rather than common stock. This reflects a more strategic, long-term approach to managing digital asset portfolios.

On-chain data further reveals a split between different holder timelines. Tokens held for one to five years have seen significant movement, suggesting profit-taking or portfolio rotation. Conversely, coins held for more than five years remain largely untouched. This indicates that cyclical or shorter-term participants are offloading assets, while the oldest cohorts maintain conviction in Bitcoin’s future.

Bitcoin miners faced a particularly challenging environment in December. The network hash rate fell 4%, marking the sharpest decline since April 2024. This drop was attributed to high-capacity operations in regions such as Xinjiang reducing output amid regulatory pressures.

Furthermore, breakeven electricity costs for major mining rigs have decreased, reflecting tighter profit margins for operators. However, historical data suggests that falling hash rates can serve as a bullish contrarian indicator. Periods of declining network power have often preceded positive 90- to 180-day forward returns.

The analysis frames these developments within the GEO framework (Global Liquidity, Ecosystem Leverage, Onchain Activity). Under this lens, the improving liquidity and DAT accumulation provide a necessary counterweight to softer on-chain metrics, such as stagnating new addresses and declining transaction fees.

Broader macro trends add complexity to Bitcoin’s outlook. The U.S. dollar has weakened to near three-month lows, which typically rallies precious metals. However, Bitcoin and other crypto assets remained under pressure during this period.

Despite this, the evolving financial ecosystem may offer new support. The rise of 'everything exchanges'—platforms aiming to integrate stocks, crypto, and prediction markets—could increase Bitcoin's liquidity and utility over time. Market observers noted that just last week, a major exchange launched an expansion introducing stock trading, prediction markets, and futures.

While Bitcoin has doubled in value over the past two years, the absence of extreme blow-off tops or drawdowns has tempered expectations. Future moves may be more measured, with midterm investors likely seeing smaller cyclical peaks and troughs rather than dramatic swings. The firm frames the current environment as one of structural recalibration. As 2025 draws to a close, Bitcoin may be in a period of consolidation that reflects broader market maturation, potentially resulting in strong positive price moves in the first quarter of next year.