This adjustment phase may lay the foundation for a strong rally in the first quarter of next year.
Author: Micah Zimmerman
Compiled by: AididiaoJP, Foresight News
In the fourth quarter of 2025, Bitcoin experienced significant volatility. Particularly in December, prices fell by nearly 9%, and volatility surged to its highest level since April 2025. However, in its 'ChainCheck' report released in mid-December, VanEck noted that market liquidity is improving and speculative leverage appears to be resetting, providing cautious optimism for long-term holders.
The digital asset analysts at VanEck painted a complex picture in the report: while on-chain activity remains weak, the liquidity environment is favorable, and speculative leverage is gradually being cleared, offering a glimmer of hope for long-term investors.
The report highlighted behavioral differences among investor groups. Digital asset treasury companies continued to buy on dips, adding 42,000 BTC in December, the largest monthly increase since July, bringing their total holdings above the one million BTC threshold.
In contrast, investors in Bitcoin exchange-traded products reduced their positions, underscoring a shift from retail-driven speculation to corporate-level asset accumulation.
VanEck analysts also noted that some digital asset treasury companies are exploring new financing methods, such as issuing preferred shares instead of common stock to raise funds for purchasing Bitcoin and maintaining operations, reflecting a more strategic, long-term approach.
On-chain data also revealed divergence between medium-term and long-term holders. Tokens held for 1 to 5 years showed notable movements, potentially due to profit-taking or portfolio adjustments; meanwhile, tokens held for over 5 years remained largely in a 'dormant' state.
VanEck interpreted this as cyclical or short-term participants selling assets, while the most seasoned holders remain confident in Bitcoin's future.
Bitcoin miners face challenges amid declining hash rate
Miners, however, are in a difficult position. VanEck data shows that the network hash rate fell by 4% in December, marking the largest decline since April 2024. This was driven by production cuts in high-hash-rate regions like Xinjiang due to regulatory pressure. Meanwhile, the break-even electricity cost for mainstream mining rigs is also declining, reflecting shrinking profit margins for miners.
However, VanEck pointed out that, historically, declines in hash rate may actually serve as a bullish contrarian indicator: following each sustained hash rate drop, Bitcoin has often seen price increases within the subsequent 90 to 180 days.
VanEck's analysis is based on its proprietary GEO framework, which evaluates the structural health of Bitcoin from three dimensions: global liquidity, ecosystem leverage, and on-chain activity, rather than merely focusing on short-term price fluctuations.
From the GEO perspective, improved liquidity and the accumulation by digital asset treasury companies have partially offset weak signals such as stagnant growth in active on-chain addresses and declining transaction fees.
The macro environment has also added complexity to Bitcoin's outlook. The US Dollar Index has fallen to a near three-month low, driving up precious metal prices, but crypto assets like Bitcoin remain under pressure.
However, the evolution of the financial ecosystem may provide new support. Market observers have noted the rise of 'universal exchanges,' platforms that aim to integrate stocks, cryptocurrencies, and prediction markets while adopting AI-driven trading and settlement systems.
Just last week, Coinbase launched extended functionalities akin to a 'universal exchange,' adding products such as stock trading, prediction markets, and futures. VanEck believes that institutions ranging from traditional brokers to crypto-native companies are rushing into this space to compete for market share, which could enhance Bitcoin's liquidity and application value in the long term.
Bitcoin's price volatility remains significant.
Nevertheless, high volatility remains a defining characteristic of Bitcoin. Despite doubling in value over the past two years and nearly tripling within three years, the absence of extreme boom-and-bust cycles seen in previous cycles has led to more rational market expectations. Going forward, Bitcoin’s trajectory may become more stable, with medium-term investors likely facing smaller cyclical fluctuations compared to the dramatic ups and downs of the past.
VanEck concluded that the overall market is currently in an adjustment phase: short- to medium-term speculative activities are receding, long-term holders are maintaining their positions, and institutional accumulation continues to grow. Coupled with miners scaling back operations, volatility converging, and macroeconomic dynamics, the market is undergoing a period of structural rebalancing.
As 2025 draws to a close, VanEck believes Bitcoin may enter a consolidation phase, reflecting the overall maturation of the market. This consolidation period could lay the groundwork for a strong rally in the first quarter of next year.
