The BTC market is experiencing a shift from "death spiral" to "sentiment recovery".

1. On-chain liquidation behavior is slowing down: Panic sentiment has bottomed out and is rebounding.

The peak of liquidation has passed: In mid to late November, the number of BTC liquidation addresses surged with the price drop, reflecting extreme market panic.

Volume contraction at the bottom: In December, although BTC has repeatedly tested the bottom, the number of liquidation addresses has significantly decreased. This indicates that under the dual pressure of "price and time," the chips that needed to be sold have basically been cleared, and the selling pressure momentum is fading.

2. Bullish premium turns positive: Leverage funds regain confidence.

Sentiment indicator reversal: The bullish payment premium for perpetual contracts (green line) has rebounded from extreme low levels (below the red line) to above the moving average (purple line).

Increased willingness to buy: This change signifies that bulls are starting to be willing to pay costs to establish positions again, marking a shift in market sentiment from "extremely pessimistic" to "cautiously optimistic."

3. Negative feedback loop is being broken: There is a fundamental difference from the deep bear market trend of 2022.

Divisions create turning points: Unlike the situation in 2022 where bulls remained unmotivated during the rebound, the current premium rebound indicates that the market has developed divisions regarding the "bull to bear" narrative.

Breaking the spiral: The recovery of bullish willingness helps the market break free from the sustained decline of negative feedback (death spiral), reducing the likelihood of a sharp drop or deep fall in the short term.

4. Chip structure optimization: From "active selling" to "passive locking."

Selling pressure exhaustion: As the low-position profit-taking has been nearly exhausted, the market is entering the final stage of turnover.

Stabilization of trapped positions: Sentiment recovery has prompted holders at high positions to stop cutting losses and shift to passive locking, providing a lighter trading environment for price recovery.

5. Key observation points for the future market.

Macro uncertainties resolved: Most macro uncertainties have been eliminated in December.

Options expiration test: Pay close attention to the massive options expiration on December 26. If the market can smoothly navigate the market makers' liquidation hedging period, the market performance in January is likely to be optimistic.

Summary: Currently, BTC is at a critical point where sentiment is shifting from extreme panic to recovery. The consistency between on-chain data and the futures market is strengthening, suggesting that the market's most challenging moments may be behind, and that 2026 is not limited to just a "one-sided bear market" scenario; the vitality of the long-short game has reappeared.