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Investors have long viewed exchange reserves as a key indicator of accumulation and asset scarcity. Bitcoin held on exchanges reached a new all-time low this month.

However, as Bitcoin enters the final days of 2025, the price risks closing the year below its opening level. Why do falling exchange reserves fail to support higher prices?

How Declining Exchange Reserves Are Backfiring on Bitcoin’s Price

Under normal conditions, a sharp drop in exchange reserves signals that long-term investors are moving BTC to cold wallets. This behavior reduces selling pressure and often pushes prices higher.

CryptoQuant data shows that exchange reserves (blue line) have been declining steadily since the start of the year. The metric reached a new low near the end of 2025. Holders have accelerated BTC withdrawals since September. Approximately 2.751 million BTC are currently held on exchanges.

Bitcoin Exchange Reserve. Source: CryptoQuant.

At the same time, Bitcoin’s price fell from above $126,000 to around $86,500. Several recent analyses highlight a different side of the issue. A decrease in the number of BTC on exchanges can sometimes have a counterproductive effect.

First, the Inter-Exchange Flow Pulse (IFP) has weakened. IFP measures the movement of Bitcoin between exchanges, reflecting overall trading activity.

Bitcoin Inter-Exchange Flow Pulse (IFP). Source: CryptoQuant.

“When IFP is high, arbitrage and liquidity provision function smoothly. Order books stay thick, and price movements tend to be more stable. When IFP declines, market ‘blood flow’ weakens. Prices become more sensitive to relatively small trades,” Analyst XWIN Research Japan explained.

XWIN Research Japan added that this liquidity decline coincides with historically low exchange reserves. Scarcity no longer supports prices as expected. Instead, thinner order books make the market fragile. Even modest selling pressure can trigger price pullbacks.

Second, most exchanges have recently shown BTC accumulation, as reflected by negative BTC Flow. In contrast, Binance—the exchange with the largest liquidity share—recorded significant inflows of Bitcoin.

BTC Exchange Flow. Source: CryptoQuant.

“This matters because Binance is the largest Bitcoin liquidity hub. User and whale behavior there often has an outsized impact on short-term price action. When Bitcoin flows into Binance, even as other exchanges see outflows, overall market strength can remain muted,”analyst Crazzyblockk explained.

In other words, Binance acts as the market’s primary liquidity center. Capital concentration on this exchange weakens broader market momentum. It also offsets accumulation signals from different platforms.

Exchange reserves have dropped to record lows. However, weak liquidity and capital concentration on Binance continue to suppress Bitcoin’s upside.

In addition, a recent BeInCrypto analysis noted that Bitcoin fell as traders de-risked ahead of a potential Bank of Japan rate hike. Such a move could threaten global liquidity and the yen carry trade.

Market dynamics in late 2025 highlight a key lesson. On-chain data does not always lend itself to a single, straightforward interpretation.

Bitcoin slid to the $85,000 level on December 15, extending its recent decline as global macro risks, leverage unwinding, and thin liquidity collided. The drop erased more than $100 billion from the total crypto market cap in just days, raising questions about whether the sell-off has finished.

While no single catalyst caused the move, five overlapping forces pushed Bitcoin lower and could keep pressure on prices in the near term.

Bank of Japan Rate Hike Fears Triggered Global De-Risking

The biggest macro driver came from Japan. Markets moved ahead of a widely expected Bank of Japan rate hike later this week, which would take Japanese policy rates to levels unseen in decades. 

Even a modest hike matters because Japan has long fueled global risk markets through the yen carry trade.

For years, investors borrowed cheap yen to buy higher-risk assets such as equities and crypto. As Japanese rates rise, that trade unwinds. Investors sell risk assets to repay yen liabilities.

Bitcoin has reacted sharply to previous BOJ hikes. In the last three instances, BTC fell between 20% and 30% in the weeks that followed. Traders began pricing in that historical pattern before the decision, pushing Bitcoin lower in advance.

US Economic Data Reintroduces Policy Uncertainty

At the same time, traders pulled back risk ahead of a dense slate of US macro data, including inflation and labor market figures.

The Federal Reserve recently cut rates, but officials signaled caution about the pace of future easing. That uncertainty matters for Bitcoin, which has increasingly traded as a liquidity-sensitive macro asset rather than a standalone hedge.

With inflation still above target and jobs data expected to weaken, markets struggled to price the Fed’s next move. That hesitation reduced speculative demand and encouraged short-term traders to step aside.

As a result, Bitcoin lost momentum just as it approached key technical levels.

Heavy Leverage Liquidations Accelerated the Decline

Once Bitcoin broke below $90,000, forced selling took over.

More than $200 million in leveraged long positions were liquidated within hours, according to derivatives data. Long traders had crowded into bullish bets after the Fed’s rate cut earlier this month.

When prices slipped, liquidation engines sold Bitcoin automatically to cover losses. That selling pushed prices lower, triggering further liquidations in a feedback loop.

This mechanical effect explains why the move was fast and sharp rather than gradual.

Crypto Liquidations On December 15. Source: Coinglass Thin Weekend Liquidity Magnified Price Swings

The timing of the sell-off made it worse.

Bitcoin broke down during thin weekend trading, when liquidity is typically lower and order books are shallow. In those conditions, relatively small sell orders can move prices aggressively.

Large holders and derivatives desks reduced exposure into low liquidity, amplifying volatility. That dynamic helped pull Bitcoin from the low-$90,000 range toward $85,000 in a short window.

Weekend breakdowns often look dramatic even when broader fundamentals remain unchanged.

Bitcoin Price Chart. Source: CoinGecko Wintermute’s Bitcoin Sales Added Spot-Market Pressure

Market structure stress was compounded by significant selling from Wintermute, one of the crypto industry’s largest market makers.

During the sell-off, on-chain and market data showed Wintermute offloading a large amount of Bitcoin — estimated at over $1.5 billion worth — across centralized exchanges. The firm reportedly sold BTC to rebalance risk and cover exposure following recent volatility and losses in derivatives markets.

Because Wintermute provides liquidity across both spot and derivatives venues, its selling carried outsized impact. 

Wintermute Sending Bitcoin to Centralized Exchanges. Source: Arkham

The timing of the sales also mattered. Wintermute’s activity occurred during low-liquidity conditions, amplifying downside moves and accelerating Bitcoin’s slide toward $85,000.

What Happens Next?

Whether Bitcoin drops further now depends on macro follow-through, not crypto-specific news.

If the Bank of Japan confirms a rate hike and global yields rise, Bitcoin could remain under pressure as carry trades unwind further. A strong yen would add to that stress.

However, if markets fully price in the move and US data softens enough to revive rate-cut expectations, Bitcoin could stabilize after the liquidation phase ends.

For now, the December 15 sell-off reflects a macro-driven reset, not a structural failure of the crypto market — but volatility is unlikely to fade quickly.

According to PANews, Goldman Sachs has released a report highlighting that while investors are currently focused on artificial intelligence and large-cap tech giants, the anticipated economic acceleration in 2026 may present greater opportunities for cyclical sectors such as industrials, materials, and consumer discretionary. Analysts expect significant growth in earnings per share (EPS) for these sectors, with industrials potentially increasing from 4% to 15%, real estate companies from 5% to 15%, and consumer discretionary companies from 3% to 7%.In contrast, the EPS growth for information technology companies may slow from 26% in 2025 to 24% in 2026. Goldman Sachs notes that despite the recent strong performance of cyclical stocks, which have outperformed defensive stocks for 14 consecutive trading days, the market has not fully reflected the potential of the 2026 economic acceleration.Goldman Sachs forecasts that the overall U.S. economic growth will accelerate in 2026, driving a 12% increase in the S&P 500 index's EPS. Analysts emphasize that although the AI boom continues, the market may have already absorbed much of the potential gains from AI.

The entire category featuring Made in USA coins has traded almost flat over the past week, even as broader crypto volatility picked up. That lack of movement stands out heading into Christmas, when thin liquidity often exposes which projects are quietly building pressure.

Several US-based tokens are now sitting at clear technical decision points, where small moves could shift the short-term trend. This piece lists three such Made in USA coins to watch before Christmas 2025, led by improving price structures, rising breakdown risks, and setups that could move sharply in either direction.

Cardano (ADA)

Cardano is one of the Made in USA coins that traders could be watching ahead of Christmas 2025. It is down around 3.5% over the past 24 hours, extending its monthly losses to over 27%.

The recent Midnight upgrade failed to shift sentiment, and downside pressure has returned as the broader market weakens.

On the daily chart, Cardano has broken down from a bearish continuation structure — the bearish pole-and-flag. The prior consolidation resolved lower, confirming sellers remain in control.

This keeps the broader downside projection active, which still points to a potential drop of nearly 39% from the earlier breakdown zone.

ADA Price Analysis: TradingView

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The first level that matters now is $0.370. This area has acted as strong support in recent weeks, but the price is already drifting toward it. A daily close below $0.370 would increase downside risk and bring $0.259 into focus, which aligns with the full bearish projection.

For the Cardano price to stabilize, selling pressure must ease near $0.370. To invalidate the bearish setup and regain momentum, Cardano needs to reclaim $0.489, followed by $0.517. Those levels mark key Fibonacci resistances and would signal buyers stepping back in.

Until then, Cardano remains vulnerable into Christmas, especially if weakness across the Made in USA category continues.

Stellar (XLM)

Stellar sits at an important decision point among Made in USA coins ahead of Christmas, as price action begins to test whether long-term adoption can still support value in the short term.

XLM is down around 2.5% over the past 24 hours, extending its monthly decline to nearly 18%. That caution becomes clearer when looking at adoption data.

While the number of RWA holders on Stellar has increased sharply over the past month, the total value of assets on the network has declined.

Stellar RWA Performance: RWA.XYZ

The price chart reinforces that message. Between December 3 and December 9, Stellar formed a hidden bearish divergence. Price made a lower high while the RSI made a higher high. RSI, or Relative Strength Index, tracks momentum. Since that divergence appeared, XLM has continued drifting lower, confirming that the broader downtrend remains intact.

The key level now is $0.231. This zone has acted as short-term support during recent pullbacks. Holding above it would suggest sellers are slowing, especially into the thin Christmas trading period. A daily close below $0.231 would expose $0.216 next, opening the door to further downside if market weakness persists.

Stellar Price Analysis: TradingView

For the bearish structure to break, Stellar needs to reclaim $0.262. That level has capped every rally attempt since mid-November.

A move above it would require roughly a 10% push and would signal that buyers are finally willing to defend higher prices again. Some hope of reclaiming that level remains as analysts on X highlight XLM flashing a buy signal.

Until then, Stellar remains a Made in USA coin where the trend still favors caution, making this support test especially important heading into Christmas.

Litecoin (LTC)

Litecoin is one of the few Made in USA coins showing relative stability heading into Christmas.

LTC is up around 1.5% on the week, making it an outlier among Made in USA coins. At the same time, it has remained down roughly 19% over the past month. This mixed performance lines up with recent fundamentals. Reports show institutions and funds have quietly accumulated around 3.7 million LTC, even as retail interest stayed muted.

That accumulation has not translated into immediate upside, but it helps explain why Litecoin has avoided deeper breakdowns compared to peers. For Made in USA projects, that kind of steady demand matters more than short-lived hype, especially into year-end.

On the price chart, Litecoin is forming an inverse head-and-shoulders pattern, which is typically bullish. This structure reflects the fading of selling pressure over time, followed by buyers slowly regaining control. The pattern attempted a breakout on December 9 but failed to hold, pushing the price back into consolidation rather than triggering a reversal.

LTC Price Analysis: TradingView

The structure remains valid as long as Litecoin holds above $79.63. A drop below this level would weaken the setup and delay any upside attempt. A deeper move below $74.72 would invalidate the pattern entirely and shift the outlook back to bearish continuation.

For confirmation, Litecoin needs a clean daily close above the neckline near $87.08. That break would signal the pattern is active again and open a path toward $97.95 first, with $101.69 as the full measured target.

Until that happens, Litecoin remains a US-based project (token) at a decision point, where steady institutional interest contrasts with still-cautious price action ahead of Christmas 2025.

According to CoinMarketCap data, the global cryptocurrency market cap now stands at $3.08T, down by 2.35% over the last 24 hours.Bitcoin (BTC) has been traded between $89,390 and $94,476 over the past 24 hours. As of 09:30 AM (UTC) today, BTC is trading at $90,421, down by -2.23%.Most major cryptocurrencies by market cap are trading mixed. Market outperformers include LUNA, LRC, and MDT, up by 42%, 23%, and 9%, respectively.Top stories of the day:Federal Reserve Lowers Benchmark Interest Rate for Third Consecutive Meeting Binance Named a Top Global Employer in eFinancialCareers’ Ideal Employers 2025–26 ReportFederal Reserve's Rate Cut Leads to Gold Price Surge XRP Transaction Fees Reach Lowest Level Since December 2020 Federal Reserve's Rate Cut and Treasury Purchases Impact Crypto Market 6 in 10 Asian High-Net-Worth Investors Plan to Increase Crypto Allocations, Sygnum Survey Shows CBOE Approves Listing of 21Shares XRP ETF President Trump Targets Bank Restrictions on Digital Asset Firms as OCC Issues New Oversight Warning Bitcoin’s Emergence as a Corporate Reserve Asset Accelerates, Says Blockstream’s Adam Back U.S. Government Launches Trump Gold Card Visa ProgramMarket movers:ETH: $3208.42 (-3.26%)BNB: $867.25 (-2.56%)XRP: $2.0162 (-2.84%)SOL: $131.17 (-5.20%)TRX: $0.2802 (+0.14%)DOGE: $0.13805 (-5.46%)ADA: $0.425 (-9.07%)WLFI: $0.1477 (-3.08%)WBTC: $90273.49 (-2.29%)BCH: $562.1 (-0.65%)

The cryptocurrency market is retreating despite the third consecutive 25 basis point cut decided by the U.S. Federal Reserve. This reduction had already been fully priced in, and the aggressive tone that followed is now weighing on risk assets. Since yesterday's peak, the total market capitalization of cryptocurrencies has fallen by 5.6%, dropping to nearly 3.05 trillion dollars.

Bitcoin has decreased by 2.5% in the last 24 hours, while Ethereum has lost 3.5%. Most large-cap altcoins are also in the red. Solana is down 6%, and Cardano has decreased by 7%. Among the top 100 tokens, Pump.fun (PUMP) is the biggest loser of the day, dropping by more than 9%.