Institutional buying floods in but fails to stop the decline, Bitcoin weakens strangely under expected support

January 16, 2026 - Bitcoin's current price is $95.44K, down more than 19% from the October high of $126.08K. Paradoxically, the market environment should be the most favorable—regulatory frameworks clearer, institutional channels more accessible, policy tilt more evident—but it has failed to prevent prices from remaining under pressure. This “bear market performance in a positive environment” has become one of the most bizarre phenomena in the current crypto market.

Institutional Support Fails: New Money Not Coming In

Reforms over the past two years have begun to show results. Bitcoin ETFs have absorbed billions of dollars, corporate investors continue to increase holdings, and regulated trading products have expanded institutional access. According to historical logic, these factors should be enough to push asset prices higher.

But the reality is quite the opposite. Despite numerous supporters, Bitcoin continues to retreat in this environment. ETF capital outflows of 52 have become the new normal, and the derivatives market reflects caution rather than bullish expectations, with low financing rates and conservative options pricing. Even Michael Saylor's Strategy company’s ongoing purchases are like a drop in the bucket, unable to stir market ripples.

Pratik Kala, portfolio manager at Apollo Crypto, bluntly states: “Many positive factors should create strong support, but the new demand in the market is minimal. This gap has caught many investors off guard.”

From Panic Selling to Participant Hesitation

This decline is not a crash-induced panic but a slow, gradual retreat.

In early October, a wave of leveraged position liquidations eliminated $19 billion in risk exposure. However, afterward, there was no rebuilding of leverage; instead, the market fell into a strange stagnation—participants are neither rushing to sell nor eager to enter quickly. This has created a “price vacuum”: trading volume dried up, liquidity evaporated, and the market slowly declined as it searched for new demand.

Since the beginning of the year, Bitcoin has fallen over 7%. While not as severe as past bear markets, this silent decline, lacking clear catalysts, has left investors feeling helpless.

Decoupling from the Stock Market Deepens Doubts

Another warning sign is the widening divergence between Bitcoin and traditional risk assets. The S&P 500 repeatedly hits new highs, led by tech stocks, but Bitcoin has failed to rise in tandem. Assets once highly correlated now follow separate paths.

This suggests that crypto-specific factors are now dominating price movements, and broader risk appetite alone is no longer enough to push Bitcoin higher. For investors, this raises a new question: during stable economic periods, what role does Bitcoin play in a diversified portfolio?

Long-term Holders’ Profit-taking Wave

Pressure also comes from another direction. Many early buyers—already highly profitable whales—began selling during price increases. With new buyers scarce, this supply pressure feels especially heavy, and the market’s absorption capacity is limited.

The Cost of Market Maturity

If Bitcoin closes the year lower, it will be the fourth annual decline in history. But this time is different. Past declines were associated with crises or technical failures, whereas this year's downturn stems from a deeper shift: the market is transitioning toward maturity.

In the old era, positive market sentiment and leveraged speculation could drive prices higher. In the new era, sentiment alone is no longer enough. The market needs genuine capital demand, more cautious participants, and higher standards of conviction.

Before participation levels significantly rebound, even without negative news shocks, Bitcoin may continue to remain under pressure at current levels. This may be a necessary adjustment period, but for investors’ patience, it will be a long test.