Bitcoin is hovering around the $78650 area right now. That’s roughly a 12% pullback from the late-October highs. On the surface, this looks like weakness. But when I break the market down piece by piece, it feels more like a pause than a trend reversal.

Price has cooled, yes. Momentum is slower. But the underlying conditions that matter for Bitcoin have not really broken.

Macro Picture: Still Friendly, Just Less Aggressive

The Fed already did most of the heavy lifting last year. Between September and December 2025, rates were cut three times, bringing policy rates down to the 3.50%–3.75% zone.

The latest dot plot suggests rates could drift toward 3.4% by the end of 2026. That tells me something important: the era of fast and aggressive cuts is probably behind us, at least for now. Big surprise 50 bps cuts don’t look likely.

That said, the easing cycle itself hasn’t ended. And with Powell’s term ending in May, markets are already pricing in the chance of a more dovish Fed leadership going forward. So even if cuts slow, the direction still matters more than the speed.

ETFs Are Selling, But Not Everyone Is Leaving

One reason price has struggled recently is simple: ETFs have been selling. November and December alone saw about $4.57 billion in net outflows, the largest since spot ETFs launched.

Yearly net inflows dropped to $21.4 billion, down sharply from $35.2 billion the year before. January rebalancing has helped stabilize things a bit, but it’s still too early to say whether fresh ETF demand will fully return.

What’s interesting is that this selling pressure hasn’t stopped corporate buyers. Strategy now holds roughly 673,783 BTC, around 3.2% of total supply. Other firms like Metaplanet and MARA have also kept adding. That tells me short-term capital is cautious, but long-term conviction hasn’t disappeared.

Regulation Might Matter More Than Price Right Now

With institutional flows slowing, regulation has quietly become a bigger deal.

The CLARITY Act, which already passed the House, aims to draw clear lines between the SEC and the CFTC and allow banks to offer crypto custody and staking. It also gives the CFTC oversight of digital commodity spot markets, something the industry has wanted for years.

In theory, this kind of framework could finally make large financial institutions comfortable enough to step in. The Senate Banking Committee was supposed to move forward in mid-January, but the markup got canceled after concerns were raised about unresolved issues in the bill.

So it’s not a done deal. But regulatory clarity remains one of the few catalysts that could unlock sidelined capital.

Liquidity Is Rising, Bitcoin Is Waiting

Another piece that often gets overlooked is liquidity. Global M2 is still near record levels and continues to trend higher.

Historically, Bitcoin doesn’t always move at the same time as liquidity. It often runs ahead of it, then goes quiet while liquidity peaks. What we’re seeing now fits that pattern pretty well.

If liquidity keeps expanding and equity markets start to look stretched, Bitcoin remains a natural rotation candidate. It doesn’t need hype. It just needs patience.

Adjusting Expectations, Not the Trend

Because ETF demand slowed and uncertainty increased, I’ve mentally reduced the macro boost for Bitcoin. Where conditions previously felt like a +35% tailwind, they now feel closer to +25%.

That’s still positive. Just less explosive.

Rate cuts are still happening. Liquidity is still expanding. Regulation is slowly moving in the right direction. None of those have flipped bearish.

On-Chain Data: Clear Range, No Panic

On-chain data actually lines up well with what price is showing.

During the November pullback, buyers consistently stepped in around $84,000. That level now looks like a real structural floor, not just a bounce. On the upside, $98,000 sits near the average cost basis of short-term holders, which explains why price keeps stalling there.

Key metrics like MVRV-Z, NUPL, and aSOPR are all sitting near neutral. That’s important. It means the market is no longer cheap, but it’s not overheated either. Fear has faded, but euphoria hasn’t returned.

This kind of environment doesn’t usually produce vertical rallies. It does, however, allow steady progress.

A Different Market Than Before

One thing that stands out this cycle is how pullbacks behave. We’re not seeing the panic selling that defined earlier cycles. Instead, price drifts lower, positions rebalance, and long-term holders stay relatively calm.

That’s what happens when institutional and long-horizon capital makes up a larger share of the market.

Volatility hasn’t vanished. But the structure feels more durable.

Bitcoin isn’t weak. It’s resting.

Support around $84,000 matters. Resistance near $98,000 matters. Between those levels, the market is digesting gains while macro, liquidity, and regulation slowly line up.

As long as those pillars remain intact, the bigger picture stays constructive—even if the next move takes time.