In the Eastern Eight Time Zone, this week, the price of Bitcoin fell below the approximately $70,000 mark, dropping into a range generally recognized by the market as below production costs, putting both miners and institutions under dual pressure from both paper losses and cash flow. After continuously increasing its holdings at high prices, MicroStrategy now faces a paper loss exceeding $4.6 billion, compounded by miners being forced to sell to maintain operations, further tightening the already fragile market sentiment. Unlike the passive liquidation on the spot market, the options and volatility data present a different picture: implied volatility has risen to the 81.7% percentile of the past year, with a defensive structure emerging, indicating a clear increase in short-term risk-averse sentiment. However, large bets in the long term remain active, and the long-term bullish narrative has not been completely denied but is being repriced amid significant volatility.
Price Inversion Production Line: Miners Forced to Liquidate Inventory
● Historically, there have not been many phases where Bitcoin prices consistently fall below production costs. The research brief mentions that similar situations occurred in 2019 and 2022, coinciding with significant mid-to-long-term ranges. The current price falling below the production cost range means that pressure on the computational power side is being released, and the market is returning to the hard cost question of "Is it worth mining a coin?" This inversion relative to basic mining costs lays the groundwork for potential supply contraction in the subsequent cycle.
● Within the current price range, most miners have passively fallen into a state of operating close to or even below cost, with single-block earnings unable to cover comprehensive expenses such as electricity, facilities, and financing. To maintain cash flow, repay loans, and update machines, some miners can only choose to continue selling BTC at unfavorable prices, turning "paper losses" into "real liquidations." This pressure is particularly fatal for small to medium miners with high leverage and above-average costs, accelerating the survival of the fittest within the industry.
● The selling pressure from miners, on one hand, has amplified the decline in the short term, directly transmitting the selling pressure to the spot market; on the other hand, most of the chips being sold under duress come from high-cost, weak capital strength groups. Once these are absorbed by long-term funds, it equates to a round of chip turnover at lower price levels. Historical experience shows that continuous selling pressure from miners often accompanies the mid-to-late stages of price bottoming, corresponding to the gradual clearance of high-cost chips, laying a more solid foundation for the next trend.
MicroStrategy…
● According to data cited from a single source in the brief, MicroStrategy currently holds approximately 713,502 BTC, with an estimated market value of about $49.66 billion at the latest price, resulting in a paper loss exceeding $4.6 billion. This scale far exceeds that of typical institutions and publicly traded companies, making it one of the most symbolically significant holders of Bitcoin off-chain. When the price fell below $70,000, the paper losses quickly magnified, prompting the market to reassess the risk tolerance of such "Bitcoin-based balance sheets."
● For MicroStrategy, the price retreating from high levels to the current range not only signifies a return of paper profits but also exposes the implied volatility risk in its financial reports and stock price. After Bitcoin fell below $70,000, the tension between the value of its holdings and financing costs was amplified, leading the market to worry: if the cycle continues downward, will such high-leverage, long-term heavy positions trigger passive reductions at some point, thereby creating a secondary shock to the market? This questioning of "institutional adherence to the bottom line" is one of the significant sources of amplified sentiment in this round of adjustments.
● In stark contrast to the short-term massive paper losses, MicroStrategy still publicly insists on a long-term bullish narrative for Bitcoin, viewing it as a strategic reserve for the company and a hedge against inflation. This "firm stance in rhetoric" and "pressure on paper" create a sharp contrast, inadvertently adding psychological burdens to the market: on one side is the flagship institution deeply trapped at high levels, while on the other, prices are mercilessly declining. Investors begin to reflect on the gap between long-term narratives and real volatility, thereby amplifying concerns about the magnitude and duration of the pullback.
Volatility Surge and Bearish Sentiment: Avoid…
● Data from the options market provides another path to observe sentiment. The brief indicates that the current implied volatility of Bitcoin is about 50%, positioned at the 81.7% percentile of historical distribution over the past year (according to a single source from Gate Research Institute). This level indicates that market participants are paying a premium for future uncertainties, pricing more risk into the options rates, which also reflects that after the sharp drop in the spot market, traders' expectations for further volatility have clearly risen.
● Alongside the rise in implied volatility, there has been a quiet shift in the options market structure from "offensive" to "defensive." The research brief mentions that the put/call ratio has increased, with more funds choosing to buy put options or construct downside hedging combinations to protect their spot and leveraged positions. This means that short-term sentiment has shifted from a one-sided chase for gains to "defense first," with many institutions and professional traders willing to pay the premium cost to protect their positions rather than easily betting on a rapid short-term V-shaped reversal.
● However, the high implied volatility is not just a signal of panic; it also lays the groundwork for future volatility trading. When implied volatility is high, once actual volatility converges and bearish sentiment eases, selling volatility and structural options strategies will have the opportunity to gain significant premiums; at the same time, those long positions in options established during the panic phase will enjoy "asymmetric" returns if prices recover in future cycles. In other words, the current high IV is both the market paying for uncertainty and a source of profit chips for the next round of sentiment reversal.
Miner Selling Pressure and Institutional Adherence: Who is…
● In the current price range, on one end are miners forced to reduce holdings for survival, while on the other end are long-term funds positioning themselves at lower prices. These two forces collide fiercely at the same price level. The miners' selling is largely due to cash flow pressure, making them more passive regarding price, while the long-term funds are more focused on the mid-to-long-term cost-effectiveness of the cycle and valuation. When these two types of entities meet on the order book, it creates a typical game of "forced selling on the supply side, active accumulation on the demand side," adding uncertainty but also dramatic tension to future price movements.
● On the institutional side, heavy holders like MicroStrategy still choose to maintain a long-term adherence stance publicly, even historically using significant pullback periods to increase their positions, reinforcing their narrative as "Bitcoin believers." Whether similar institutions will re-enter to increase their holdings after the current price falls below the production cost range remains uncertain, but the market generally expects: as long as the long-term macro story is not overturned, these high-recognition institutions are unlikely to easily turn to liquidation, and are more likely to continue extending their allocation cycle within the limits of liquidity.
● Impatient, short-term chips are being forced out during the fluctuations and declines, with chips shifting from high-leverage retail investors and weaker hands to long-term holders with stronger volatility resistance. As this round of liquidation progresses, the "concentration" of Bitcoin holdings is expected to increase, with more chips locked in low-frequency trading wallets and institutional balance sheets. Historically, this structural redistribution often precedes the initiation of the next trend, but the time span and volatility rhythm of this process are difficult to grasp accurately.
Off-Chain Linkage and Emotional Spillover: BNB…
● The weakness of Bitcoin quickly spreads to other leading assets. According to the brief, the price of BNB has fallen below $680, with a 24-hour decline of about 9.37%, particularly noticeable among leading assets. This data indicates that risk sentiment is no longer limited to Bitcoin itself but is spreading to core ecosystem tokens, with funds systematically reducing risk exposure and cutting back on high-beta assets. The overall market's "de-leveraging" process is transforming from point events into area-wide impacts.
● In contrast to the clear pressure on the spot market, the data from forward derivatives reveals another layer of meaning. The brief shows that the Bullish platform's Bitcoin options trading volume for Q4 2025 has exceeded $9 billion (according to a single source), indicating that even amid the current significant pullback, bets surrounding the forward market remain active. A large volume of trading is concentrated on contracts with longer expiration dates, reflecting that a portion of funds has not exited but has chosen to bet on Bitcoin completing value recovery over a longer cycle through more time-flexible tools.
● Therefore, what we see on the market is a seemingly contradictory combination: mainstream assets are declining in the short term, with spot and leveraged positions being forced to de-leverage, while long-dated options are experiencing explosive trading volumes. This behavior pattern of "cutting risk on the short end, seizing volatility rights on the long end" highlights that the market is simultaneously locking in losses through position reduction while competing to secure potential rebounds and high-volatility returns in longer time dimensions, with risks and opportunities being re-split and repriced across different tools and timeframes.
From Production Costs to Emotional Bottom: This…
When prices fall below the production cost range, it often corresponds to important mid-to-long-term observations for Bitcoin, but the rhythm has always been difficult to accurately depict. Experiences from 2019 and 2022 remind us that cost inversion is more of a "range signal," indicating that the supply side is under pressure rather than a specific "price coordinate." In this round of adjustments, the accelerated selling pressure from miners clearing high-cost chips intertwines with the long-term funds' accumulation at lower prices, reshaping the chip structure and psychological foundation of this cycle. While it is impossible and inappropriate to predict specific bottom prices and times, what deserves more attention is the migration of chips from weak hands to strong hands, the gradual decline of implied volatility from high levels, and the continued reduction of selling pressure from miners and high-leverage funds. When these signals gradually resonate, the emotional bottom is often built unconsciously, and the real price turning point often appears quietly when most people still harbor doubts.
Join our community to discuss and become stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh
OKX Benefits Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Benefits Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
