Bitcoin Shows Mixed Signals as Regulatory Progress Counters Mounting Selling Pressure - October 24, 2025

Market Overview

The cryptocurrency market is experiencing a complex dynamic as Bitcoin trades around $109,400 following recent volatility. Despite showing a modest rebound, BTC remains trapped below key resistance levels, with the 50-day and 100-day moving averages converging near $112,000-$114,000 acting as significant supply zones. The market is currently testing the conviction of investors who bought near recent highs, with 15% of Bitcoin's supply now sitting at a loss.

China's continued influence in the Bitcoin mining landscape remains significant, as the country maintains its position as the third-largest contributor to global Bitcoin mining despite 2021 bans. This demonstrates the network's resilience and distributed nature. Meanwhile, institutional activity shows mixed signals, with major players like BlackRock actively working to attract Bitcoin whales to their ETFs, while some whales have been taking profits or even adding leveraged short positions.

The regulatory environment presents both opportunities and challenges. U.S. crypto market structure legislation is gaining bipartisan momentum, with Coinbase CEO Brian Armstrong reporting that the bill is "90% there" and progress could come by Thanksgiving. However, political divisions remain, with crypto executives facing scrutiny from Democratic senators as negotiations continue.

Technical indicators suggest Bitcoin is at a critical juncture, with the Short-Term Holder Spent Output Profit Ratio (STH-SOPR) falling below 1.0 for the first time since April, indicating short-term holders are selling at a loss. This capitulation phase could potentially set the stage for a market bottom, though immediate upside faces significant resistance.

Major Negative News

• Short-Term Holder Capitulation Intensifies: Bitcoin's STH-SOPR has dropped to 0.992, its lowest level since April, indicating that short-term investors are selling their coins at an average loss of 0.8%, creating renewed selling pressure and bearish sentiment.

• Bitcoin Supply in Profit Sees Sharp Decline: Following the latest market crash, only 85% of Bitcoin supply remains in profit, with 15% at a loss. This pattern historically occurs when BTC breaks down from new all-time highs, raising concerns of further price drops if the $113,100 range isn't reclaimed.

• Whale Short Positions Emerge: Bitcoin whales have added fresh 40X leveraged short positions ahead of Trump announcements, betting on downside volatility and suggesting major players expect potential price drops.

• Legislative Gridlock Continues: Despite progress reports, crypto CEOs faced "Senate fury" as the market structure bill stalls, with significant gaps remaining between Democrats and Republicans on timeline and key issues, prolonging regulatory uncertainty.

• Quantum Computing Threat Grows: Google's breakthrough with its Willow processor has achieved verified quantum speed-up, vastly outpacing classical supercomputers and raising growing concerns about potential threats to Bitcoin's cryptographic security.

• Major Institutional Fund Excludes Crypto: Venture capital giant Andreessen Horowitz is reportedly raising $10 billion for new AI and defense investments while notably excluding crypto, despite their previous bullish stance on decentralization.

Major Positive News

• Standard Chartered Predicts $200K Bitcoin: The major bank has issued a bold prediction that Bitcoin will soon reach $200,000, a forecast that is reportedly fueling a buying frenzy and suggesting the market may be entering a new bull phase.

• Mid-Size Whales Aggressively Accumulating: Despite recent bearish sessions, Bitcoin is experiencing robust buying pressure from mid-size whales and smart money, with these significant investors aggressively expanding their holdings, indicating strong underlying confidence.

• U.S. Regulatory Framework Advancing: David Sacks believes the U.S. is in an "excellent position" to pass crypto market structure legislation this year with bipartisan support, with Senate Democrats meeting industry CEOs and a potential Thanksgiving timeline for progress.

• Major Institutional ETF Interest: T. Rowe Price has filed for a mixed cryptocurrency ETF offering exposure to Bitcoin, Ethereum, and Solana, joining a growing list of traditional finance firms entering the digital asset space and signaling increasing institutional adoption.

• Trump Administration Provides Crypto Support: President Trump's pardon of Binance founder CZ has boosted market sentiment, with Bitcoin steadying near $109K following the announcement, demonstrating continued political support for the crypto industry.

• China Mining Resilience Confirmed: Despite 2021 bans, China remains the third-largest contributor to global Bitcoin mining, showing a modest hashrate increase and demonstrating the network's resilience and ability to operate globally despite regulatory challenges.

Key Risk Factors

• Technical breakdown risk if Bitcoin fails to hold the $106,000-$107,000 support range, potentially exposing further downside to $102,000 or $98,000
• Continued selling pressure from short-term holders realizing losses, as indicated by STH-SOPR remaining below 1.0
• Political gridlock potentially delaying crucial crypto market structure legislation despite reported progress
• Quantum computing advances posing long-term threats to Bitcoin's cryptographic security infrastructure
• Large-scale institutional capital potentially shifting focus away from crypto to AI and defense sectors
• Persistent leverage risks and whale short positioning suggesting potential for increased volatility

Conclusion and Outlook

The Bitcoin market finds itself at a critical inflection point, with conflicting signals creating uncertainty about near-term direction. While regulatory progress and institutional adoption continue to provide fundamental support, technical indicators and on-chain metrics suggest the market is undergoing a necessary cleansing phase. The capitulation among short-term holders and 15% of supply now at a loss historically marks important bottoms, but recovery will require sustained buying pressure and a decisive break above key resistance levels.

Institutional interest remains robust, with major players like BlackRock actively seeking Bitcoin whale participation in their ETFs and traditional finance firms like T. Rowe Price filing for crypto ETF offerings. The potential for U.S. regulatory clarity by Thanksgiving could serve as a significant catalyst, though political divisions suggest this timeline may face challenges. Standard Chartered's bold $200K price prediction reflects the growing institutional confidence in Bitcoin's long-term trajectory.

The market's ability to hold above the $106,000-$107,000 support zone will be crucial in determining whether the current consolidation leads to renewed strength or deeper correction. Smart money accumulation and whale buying activity suggest sophisticated investors view current levels as attractive, despite short-term technical weakness. The resolution of regulatory uncertainty and continued institutional adoption remain the most significant catalysts for sustained upward movement.

Looking ahead, Bitcoin's resilience in maintaining network operations globally, including China's continued mining participation, demonstrates the fundamental strength of the decentralized network. However, emerging risks from quantum computing advances and shifting institutional capital allocation warrant careful monitoring as potential long-term challenges to the current bull market narrative.

*Key Monitoring Points*: Watch for Bitcoin's ability to reclaim and hold above $112,000-$114,000 resistance, progress on U.S. crypto legislation timeline, continued whale accumulation patterns, STH-SOPR recovery above 1.0, and any developments in quantum computing threats to crypto security.

※ This report is provided for informational purposes only and is not investment advice or a recommendation. Investment decisions should be made at your own discretion and risk.

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