Bitcoin Faces Year-End Headwinds as Key Support Levels Tested

Bitcoin CRYPTO000BTC

As the year draws to a close, Bitcoin is navigating a challenging landscape marked by selling pressure and diminished momentum. The cryptocurrency, which set a record high in October, now trades significantly lower, struggling to maintain a foothold above the $90,000 threshold. A confluence of factors—including a historic options expiry, capital outflows from exchange-traded funds (ETFs), and weakening on-chain metrics—is colliding with thin holiday liquidity, creating a vulnerable price environment.

Currently trading near $87,400, Bitcoin sits approximately 30% below its early-October all-time high. Recent weeks have seen the asset confined to a narrow trading band, largely oscillating between $85,000 and $90,000 without achieving a decisive upward breakout.

Key technical indicators highlight the current weakness:
- The price sits nearly 30% below its 52-week high.
- The 50-day moving average, at $91,711, runs clearly above the current spot price.
- The 14-day Relative Strength Index (RSI) reads 38.1, signaling weak momentum.

The psychologically significant $90,000 zone remains a formidable barrier. In the near term, a sustained move above $90,500 would improve the technical picture, while a drop below $85,000 would likely intensify selling pressure.

Historic Options Expiry Injects Volatility

A major market event this week was the record-setting options expiry on December 26th at Deribit, the world's largest Bitcoin options exchange. Crypto options with a notional value of roughly $28 billion expired, of which approximately $23.3 billion were Bitcoin contracts.

Notable details from the expiry include:
- A Put-Call Ratio of 0.38, indicating nearly three times more call options than puts.
- A Max Pain point at $96,000, suggesting previously optimistic positioning.
- A heavy concentration of open interest at strike prices between $100,000 and $116,000.

A brief rally toward $89,000 preceded the expiry, initially driven by short covering. Analysts noted that "real" high-volume buyers subsequently entered the market. However, the upward impulse proved incomplete without a reclaim of the $90,500 level, and prices subsequently turned lower.

ETF Outflows Dampen Institutional Mood

Compounding the pressure, U.S. spot Bitcoin ETFs recorded noticeable outflows in the days leading up to Christmas. Significant data points include:
- Aggregate outflows from Bitcoin and Ethereum ETFs totaled about $232 million on December 24th.
- Bitcoin-specific ETFs accounted for roughly $175 million of that total.
- BlackRock's IBIT saw outflows exceeding $91 million.
- Grayscale's GBTC experienced further outflows of approximately $25 million.

Given that ETFs are considered a crucial gateway for institutional capital in 2025, this shift from net inflows to outflows signals increased caution and adds direct selling pressure to the spot market.

On-Chain Metrics Flash Warning Signs

The latest "Bitcoin ChainCheck Report" from VanEck presents a cooling picture of blockchain fundamentals.

Network Activity Cools

• The hash rate has declined 4% month-over-month, the most pronounced drop since April 2024.
• Daily transaction fees paid, measured in U.S. dollars, have fallen by 14%.
• The creation of new addresses has stagnated, dipping slightly by 1%.

These trends point to reduced network utilization and a lower willingness to pay for transactions.

Exchange Balances Swell

Over the past ten days, more than 17,700 BTC have moved to exchange-controlled wallets. The proportion of the circulating supply held on trading platforms increased from 6.03% to 6.12%. Historically, such an accumulation is often viewed as a precursor to increased selling, as coins are transferred from cold storage to liquid venues.

Holder Dynamics Reveal a Split

A divergence is evident among investor cohorts:
- Holders with a 1-to-5-year timeframe are increasingly taking profits or reducing exposure.
- In contrast, very long-term holders (5+ years) are largely holding steady and remaining invested.

This configuration suggests that medium-to-long-term investors are de-risking, while the most committed holders have not yet joined the sell-side.

2025 Shapes Up as a Difficult Year

2025 is emerging as one of the more challenging years for the flagship cryptocurrency. After reaching an all-time high near $126,000 in October, Bitcoin is now on track to post a negative annual return—a relatively rare occurrence in its history.

A Particularly Weak Fourth Quarter

• The fourth quarter is poised to close with a loss of approximately 22%.
• This would mark the weakest quarterly performance since Q2 2022.
• The downward move was triggered by an October flash crash, fueled by concerns over U.S.-China tariffs.

The Crypto Fear & Greed Index currently reads 27, firmly in "Fear" territory. This aligns with a skittish market that appears more focused on risk reduction than establishing new positions ahead of 2026.

Competition from Traditional Havens

Amid Bitcoin's weakness, traditional safe-haven assets have posted strong gains:
- Gold is in a powerful uptrend, gaining about 70% year-to-date and trading near $4,500 per ounce.
- Silver rallied 8% in a single session, climbing to approximately $78.

Market experts interpret this dynamic as evidence of a structural shift—away from a purely U.S.-centric financial system toward a more multipolar framework where precious metals regain importance. For Bitcoin, this represents added competition for capital that, during uncertain periods, may flow toward established hedges.

Technical Outlook and Scenarios for 2026

The Short-Term View

One widely-followed crypto analyst describes the present state as a "compression phase"—characterized by a tight range, fading momentum, but potential for a powerful breakout in either direction. The month of January 2026 is seen as a potential inflection point for the next significant trend impulse.

Indicator Analysis and Key Levels

• The RSI remains below the neutral 50 level, continuing to signal downward pressure.
• The MACD is approaching the zero line from above, which can indicate building selling momentum.
• The overarching downtrend line from the all-time high remains intact, capping recovery attempts.

This sets up two primary scenarios:
- Bullish Case: A sustained breakout above $94,000 would technically open the door for a move back toward $100,000.
- Bearish Case: A breakdown below $80,000 would significantly darken the outlook and shift focus to lower support zones.

Conclusion: Critical Levels for the Transition

Bitcoin enters 2026 carrying significant baggage: persistent selling pressure, waning institutional interest via ETFs, and softer on-chain signals. The $90,000 area remains the central psychological battleground, with $85,000 acting as crucial near-term support and $94,000 representing the key technical resistance.

While some observers point to historical patterns of strong rebounds following weak years, caution currently prevails. A partial counterweight to ETF outflows comes from corporate buyers; Digital Asset Treasuries has accumulated roughly 42,000 BTC in recent weeks.

Thin liquidity conditions around the year-end transition are likely to amplify price swings in the short term. For the coming weeks, three factors will be decisive: stability above $85,000, a potential breakout above $94,000, and the trajectory of ETF flows, which will help set the tone for the crypto market's entry into 2026.