Navigating Bitcoin’s Recent Price Decline: A Tale of Two Strategies

Bitcoin’s market activity has shown a compelling dichotomy in the face of its recent price decline, plummeting from over $100,000 to under $90,000 by late 2025. The responses of Bitcoin holders during this downturn reveal divergent strategies. On one side, a significant number of holders are opting to sell, while others leverage their assets to borrow against their Bitcoin, preserving their positions in anticipation of future appreciation. Understanding these contrasting approaches can provide insights into the broader market dynamics and potential future trajectories for Bitcoin.

Heavy Distribution Among Sellers

Recent data from Glassnode’s Hodler Net Position Change metric indicates a heavy distribution phase among long-term holders of Bitcoin. The stark red bars on the chart reflect widespread selling activity, notably intensifying from late November 2025 when net position changes plunged beyond -60,000 BTC. This marked one of the heaviest distribution periods observed in recent memory. Such behavior typically emerges when asset prices decline, prompting holders who purchased near cycle peaks or those in need of immediate liquidity to exit their positions. The resulting selling pressure contributes significantly to the overall bearish sentiment, further compounding Bitcoin’s descent in market value.

Borrowing as a Strategic Alternative

In stark contrast, data from platforms like CryptoQuant and Nexo reveals that while some are selling, a significant portion of Bitcoin holders is employing a strategy of borrowing against their assets. Despite the selling pressure, Bitcoin has retained a consistent share of 53-57% in total collateral across lending platforms throughout 2025, with figures showing 54.3% as of July, only a slight dip from January’s 53.8%. This strategy involves using Bitcoin as collateral to secure stablecoins or fiat currency, allowing holders to access liquidity without liquidating their investments. Borrowing instead of selling signifies a nuanced approach, driven by long-term conviction and a desire to weather market fluctuations without incurring capital gains taxes.

The Rationale Behind Borrowing

The decision to borrow rather than sell during downturns reflects deeper financial strategies and risk assessments. By borrowing against Bitcoin, holders can avoid triggering capital gains taxes, allowing them to preserve their principal investment while maintaining exposure to any potential recovery in Bitcoin’s price. This behavior is reminiscent of traditional financial practices where affluent individuals leverage their assets—such as homes or stocks—without forfeiting ownership. The trend suggests that Bitcoin is increasingly perceived not solely as a speculative asset but as a valuable store of wealth that can be leveraged for liquidity, underscoring a shift in how digital assets are treated in the broader financial ecosystem.

Divergent Market Narratives

The divergence in strategies among Bitcoin holders presents two prevailing narratives in the market. On one hand, traditional holders are contributing to genuine selling pressure, reflected in Bitcoin’s current price range of $80-90K. This behavior contrasts with a more sophisticated group of holders who refuse to capitulate. Instead, these holders choose to leverage their positions, reducing supply in the market and potentially setting themselves up for a supply shock should prices recover. Those inclined to borrow view the current market conditions as transitory and maintain faith in Bitcoin’s long-term growth potential.

Implications for the Future of Bitcoin

The contrasting approaches between selling and borrowing illustrate a broader trend emerging in the cryptocurrency market. The capability to access lending and borrowing platforms has facilitated the rise of a new cohort of "unshakeable" Bitcoin holders. These individuals are willing to endure market volatility and maintain their positions through strategic leverage, rather than succumbing to panic selling. This fundamental change in behavior could have significant implications for Bitcoin’s price recovery and overall market stability. If market conditions eventually favor these long-term holders’ confidence, we may witness a robust rebound fueled by reduced supply and enhanced market interest.

Conclusion: A New Era of Bitcoin Holding

As Bitcoin navigates its price fluctuations, the responses of its holders—whether through selling or borrowing—reflect broader themes within the cryptocurrency landscape. The current split highlights varying levels of conviction, access to financial tools, and strategic financial planning among holders. The growing acceptance of Bitcoin as a leveraged asset indicates a maturation of the market, as holders deploy sophisticated strategies to protect their investments while positioning themselves for potential future gains. Whether this evolving landscape will lead to a sustained recovery or further downturn remains to be seen, but one thing is clear: the narrative surrounding Bitcoin is evolving, and both sellers and borrowers are crucial to its unfolding story.