📉 Bitcoin Bears Tighten Their Grip as Year-End Outlook Weakens

Bitcoin extended its recent slide on Thursday, falling 4.2% to $86,681.41 after touching its lowest point in seven months. The flagship cryptocurrency, which surged to a record $126,223.18 in early October, is now down more than 7% for the year — positioning 2025 as Bitcoin’s first negative annual performance since 2022.

Adding to the pressure, Bitcoin has now broken below both its 50-day and 200-day moving averages. Analysts say this shift has pushed trend-following traders away from the market.

“Bitcoin’s price structure has become extremely fragile and tilted lower,” said Sean Dawson, head of research at Derive.xyz. “Early bull catalysts, such as expectations of looser monetary policy, have faded — leaving little to support upward momentum.”

Dawson noted that over the past month, combined long and short liquidations across crypto markets have reached $8.25 billion, underscoring the severity of the recent shakeout.

A key driver of the downturn has been the Federal Reserve’s increasingly cautious messaging. Several Fed officials have pushed back against the need for imminent rate cuts, pointing to persistent inflation — a stance that has cooled optimism across risk assets, including equities and digital assets.

Dawson warned that heightened volatility in tech stocks could drag Bitcoin as low as $75,000 before year-end, though he expects a sharp rebound if that level is hit.

Options activity echoes this caution. Derive.xyz highlighted a large cluster of put options — about 13,800 contracts — set at a strike price of $85,000 and expiring December 26. These puts represent investors seeking protection if Bitcoin dips further below that threshold.

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Not everyone is convinced the downturn will continue.

Sean Farrell, head of digital asset strategy at Fundstrat, argues that market conditions may be nearing a short-term turning point. He notes that Bitcoin’s slide below $90,000 has triggered oversold signals he considers “a potential value area” for opportunistic buyers. He also believes last week’s forced selling has largely washed out weaker positions.

Despite isolated optimism, several derivatives indicators remain firmly bearish.

Bitcoin’s call-put skew — a measure of sentiment based on differences in implied volatility — has moved deeper into negative territory. The 30-day skew dropped from –2.9% to –5.3%, reflecting increasing demand for protective puts relative to bullish call options.

Volatility has surged across the board as well:

This jump suggests traders anticipate larger price swings ahead, with most positioning for additional downside.

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