Crypto markets remained under pressure as bitcoin hovered near $87,000, with options positioning and analyst commentary pointing to increasing risk of a deeper decline into early 2026.
The recent rally appears to be losing momentum, with price action increasingly defined by short-term rejections followed by renewed selling, as CoinDesk reported on Wednesday.
Bitcoin briefly rose to $90,000 late Wednesday before falling back below $87,000, underperforming equity markets amid the latest round of macro uncertainty. Traders are increasingly positioning themselves for further downside, especially around the December 26 options expiration.
Data from the derivatives markets shows a strong build-up of put options at the $85,000 strike, suggesting expectations that bitcoin may dip below this level in the near term.
Thirty-day implied volatility has risen toward 45%, Derive.xyz said in an email to CoinDesk, while the skew remains strongly negative, reflecting demand for downside protection. Longer-dated bias is also anchored near -5%, indicating that bearish sentiment extends well into the first half of next year.
“There is a clear defensive positioning at the end of the year,” said Alex Kuptsikevich, chief market analyst at FxPro. “The uptrend that formed at the end of November has been broken and the market is now trading more like it did during the October selloff, with sharp recoveries that are not gaining traction.”
Ether shows a slightly more balanced profile. While short-dated ETH skew remains negative, longer-dated skew is closer to neutral, suggesting less conviction around a sustained downside.
Still, traders have accumulated a significant cluster of puts around the $2,500 level for the December 26 expiration, highlighting a key area of concern.
Beyond short-term positioning, some analysts warn that bitcoin’s long-term cycle may be turning. Bloomberg Intelligence commodities strategist Mike McGlone said the rally above $100,000 earlier this year may have planted the seeds for a much deeper retracement.
“Bitcoin’s surge toward six figures may have triggered a cycle back toward $10,000, potentially in 2026,” McGlone said, arguing that periods of extreme wealth creation are often followed by sharp declines. He added that the next economic slowdown could be led by a collapse in highly speculative digital assets with effectively unlimited supply.
Despite the warning, McGlone noted that bitcoin itself has been relatively resilient, only down about 5% in 2025 through mid-December.
Still, data from CryptoQuant shows that short-term holders have been at a loss for over a month, while Glassnode estimates that long-term holders have lost around 500,000 BTC since July.
Meanwhile, FxPro’s Kuptsikevich said the Federal Reserve’s rate cuts this year meant less as a direct catalyst and more as a signal that tightening was over, allowing investors to keep risk exposure through the draw.
“That patience helped push bitcoin to new highs earlier this year,” he said. “But leverage remains high, and the wave of liquidations in October revealed how fragile price discovery can be when positioning becomes crowded.”
Looking ahead, geopolitical risks and leverage ratios will be key drivers into 2026. So far, markets appear set for volatility, with downside risks returning to focus as the year draws to a close.
