Bitcoin Sell Pressure Collapses as SOPR Drops to 1.35 and Fed Cut Odds Hit 92% — Could a Santa Rally Be Next?

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• Long-term Bitcoin holders sharply reduced selling as BTC fell below $90K.
• SOPR Ratio hits a 2024 low at 1.35, signaling a market-wide profitability reset.
• Analysts expect a potential December recovery driven by improving liquidity and Fed rate-cut odds.

Bitcoin’s drop below $90,000 is beginning to reshape trader behavior across the market, with new data signaling a major cooling in long-term holder activity. According to fresh insights from CryptoQuant, long-term investors have sharply reduced selling as profitability on much of their supply disappears — a shift that often precedes periods of market stabilization.

Long-Term Holders Hit a “Reset” as SOPR Ratio Falls to 1.35

A key metric tracking Bitcoin’s spending behavior has fallen to its lowest level since early 2024. CryptoQuant highlighted that the SOPR Ratio, which compares the profitability of long-term holders (LTHs) to short-term holders (STHs), has dropped to 1.35. This steep decline aligns with BTC’s pullback to the $89,000–$90,000 range.

The shift suggests two significant developments:
• Heavy distribution from LTHs has ended, reducing immediate sell pressure.
• A wider market cool-down is underway as profitability resets across the board.

LTHs — wallets holding BTC for more than 155 days — now account for far fewer profitable transactions. Instead, CryptoQuant notes that short-term traders are driving most in-profit activity, often reacting emotionally to rapid price swings. Their behavior, described as “knee-jerk,” has contributed to sudden shifts in STH net positions throughout November and early December.

Short-Term Traders Uncertain as BTC Tests Key Support

Short-term holders saw a sharp increase in net position on November 24, only to flip negative again on December 1 after another bout of downside volatility. This pattern reflects growing confusion among speculators, who have repeatedly misjudged the trend during BTC’s consolidation near the monthly open.

Despite the turbulence, several analysts expect December to offer relief. Coinbase Institutional reaffirmed its earlier prediction of a December recovery, citing improved global liquidity, ETF inflow potential, and a sharp rise in expectations for a Federal Reserve rate cut.

Macro Tailwinds Build Toward a Potential December Rally

Coinbase now places the odds of a December rate cut at 92%, supported by a rebound in global M2 liquidity — historically a strong driver of crypto performance. Still, the firm warned that sentiment remains dominated by fear as both retail and institutional players hesitate ahead of the Fed’s December 10 decision.

Analysts Nic Puckrin , crypto analyst and co-founder of Coin Bureau educational platform sees the announcement as a potential trigger for a “Santa rally”, though the impact will depend heavily on Fed Chair Jerome Powell’s tone. Any hawkish signals could cap upside despite improving macro conditions.

"If the Fed cuts rates on December 10th, along with ending QT, there's little standing in the way of a Santa rally for Bitcoin - bar any major geopolitical bombshell.” 

Additional tailwinds include speculation that Kevin Hassett may be appointed Fed Chair in early 2026 — a move analysts believe would usher in a more dovish policy environment.

With long-term holder selling pressure collapsing and macro catalysts building, Bitcoin enters December at a decisive moment. The market has cooled, speculative excess has been flushed out, and liquidity indicators are turning positive. Whether this sets the stage for a renewed breakout will depend largely on the Federal Reserve — and how traders interpret the road to 2026.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.