Bitcoin is forming a significant “divergence” ahead of 2026: forced selling pressure in Asia (due to tighter mining and selling by long-term holder ) contrasts with institutional money flowing into Bitcoin ETFs in the US.
While sentiment remains risk-off and many supply-side yield indicators are weakening, data suggests the current selling pressure may stem from risk management needs and tighter profit margins, rather than widespread panic.
- The sharp decline in profitable supply has pushed BTC 's NUPL into net loss territory, creating a scenario similar to capitulation but with significant divergence.
- Tightening mining controls in China are reducing hashrate, putting selling pressure on miners and contributing to net spot selling on Asian exchanges.
- Bitcoin ETF spot Capital in the US have surged, reflecting sustained institutional demand, which could influence BTC trajectory toward 2026.
Bitcoin is entering a phase of technical "capitulation," but market divergence remains clear.
BTC is under pressure as profitable supply decreases and NUPL enters net loss territory, but buying from US Bitcoin ETF spots is diverging from selling pressure in Asia, meaning this decline doesn't necessarily signal a long-term downtrend.
The market ahead of 2026 is exhibiting two contrasting states. On the one hand, BTC has not recovered its price levels since the October drop, causing the percentage of profitable supply to fall from 98% before the sell-off to around 63%. This development is typically accompanied by narrowing profit margins and pressure to realize losses.
As a result, BTC 's NUPL has plunged into net loss territory. From a technical structural and investor behavior perspective, this type of setup is often described as "capitulation." However, with supply and demand flows from different regions and investor groups moving in opposite directions, concluding "bearish" may require caution.
To monitor this supply-demand divergence in the short term, traders often combine Derivative signals (funding, liquidation) and market liquidation in perpetual contract products; you can find more analytical tools and market insights at BingX .
Closing down mining rigs and selling by long-term holder explains Bitcoin's weakness.
The tightening of mining regulations in China has led to a reduction in mining capacity on the network, driving down hashrate and creating selling pressure from miners; at the same time, on-chain data shows that Asian exchanges are trending towards net selling of spot assets, and long-term holder are also reducing their holdings.
Bitcoin's supply dynamics are undergoing a quiet "purification." Notably, much of the pressure is coming from China as it tightens mining restrictions . According to Chia , the campaign in Xinjiang has shut down approximately 1.3 GW of mining capacity and taken 400,000 Mining Rig out of operation.
When a significant portion of mining operations are forced to stop, miners face cash flow risks and tend to sell BTC to cover costs. The original article states that hashrate decreased by approximately 8%, making the network temporarily less secure against attack scenarios. This development reinforces the "sell pressure" narrative stemming from the supply side.
Descriptive data shows that the hashrate decreased from 1.12 billion TH/s to 1.07 billion TH/s in less than a week. Given that China is believed to hold approximately 14% of total hashpower, regional changes could amplify the impact on circulating supply and short-term sentiment.
On the spot market side, on-chain data indicates that Asian exchanges recorded consistent net spot selling in Q4. Simultaneously, long-term holder (LTH) also reduced their positions, with selling activity increasing in the last 1–2 months—a sign of distribution as profits weakened.
However, the US market is heading in a different direction: US spot Bitcoin ETFs just recorded their largest Capital in over a month . With regional selling and institutional buying occurring simultaneously, this "divergence" could become a crucial variable shaping BTC trajectory as it approaches 2026.
Forced selling, not panic selling, could shape the trajectory of the BTC in 2026.
Current signals lean toward forced selling due to miner profit margins and macroeconomic risks, while institutional money flows through Bitcoin ETFs remain active; this makes the correction resemble a rebalancing phase rather than a fear-driven capitulation.
The 2026 picture is being shaped by subtle shifts in supply dynamics. As macroeconomic volatility increases and mining pressure returns in China, various holding groups may be pushed into selling to manage losses. Miners are a clear link, evidenced by the net change in miner positions turning negative.
In an environment where hashrate is decreasing by around 8% as described, mining profit margins can be squeezed, increasing the likelihood of continued selling. The common consequence is that short-term upward momentum is limited, weakening the "favorable winds" of Q4, especially when forced supply encounters thin liquidation .
The key point is that this behavior resembles forced selling rather than panic selling. The original text states that Bitcoin ETFs attracted $457 million in just one day, indicating that institutions continue to buy. As long as this large influx of money remains, the market may interpret the decline as a healthy reset rather than fear-driven capitulation.
If the divergence between selling pressure in Asia and institutional demand in the US persists, this “two-speed” structure could determine how BTC enters 2026: on one side, supply being forced Dump by events/costs, and on the other, long-term asset allocation demand.
Conclude
In the short term, BTC is under pressure from forced selling led by Asia, linked to China's mining shutdowns, declining hashrate, and distribution from long-term holder . However, institutional demand remains evident through Bitcoin ETF spot Capital in the US, creating a divergence that could become a key factor as the market enters 2026.
Frequently Asked Questions
Why is a decrease in the "profitable supply" ratio of Bitcoin important?
When the proportion of profitable supply decreases, many investors shift to unrealized losses, thinning market-wide profit margins and increasing the likelihood of selling to cut losses or rebalance risk.
What does it mean when Bitcoin's NUPL enters net loss territory?
NUPL entering a net loss zone typically reflects a significant portion of supply being at a relative loss compared to the Capital basis, sometimes coinciding with capitulation phases. However, it's necessary to compare this with cash flow and market structure to avoid one-sided conclusions.
How will China's tightening of mining regulations affect BTC ?
When mining capacity is taken offline, hashrate decreases, and miners may sell BTC to cover costs, creating further supply pressure. Additionally, regional shocks can quickly impact sentiment and short-term liquidation .
What does the divergence between net selling in Asia and Capital inflows of US ETFs mean?
It shows that supply and demand from different groups are moving in opposite directions: one side is selling due to pressure/costs, the other is buying for long-term allocation. If this divergence persists, it could shape the trend of BTC before 2026.
