Crypto markets remained under pressure as bitcoin hovered around $87,000, with options positioning and analyst commentary pointing to growing risks of a deeper recession into early 2026.
The recent rally appears to be losing momentum, with price action increasingly defined by short-lived bounces followed by renewed selling, as CoinDesk reported on Wednesday.
Bitcoin briefly rose to $90,000 late on Wednesday before falling back below $87,000, underperforming stock markets during the latest bout of macroeconomic uncertainty. Traders are increasingly positioning themselves for further declines, particularly around the December 26 options expiration.
Data from derivatives markets shows a large buildup of put options at the $85,000 level, suggesting expectations that bitcoin could fall below that level in the near term.
Thirty-day implied volatility has increased to 45%, Derive.xyz said in an email to CoinDesk, while the bias remains firmly negative, reflecting demand for downside protection. The longer-term bias is also anchored near -5%, indicating bearish sentiment extends well into the first half of next year.
“There is a clear defensive positioning heading into the end of the year,” said Alex Kuptsikevich, chief market analyst at FxPro. “The uptrend that formed in late November has been broken and the market is now trading more like it did during the October sell-off, with strong bounces failing to gain ground.”
Ether shows a slightly more balanced profile. While ETH’s short-term bias remains negative, the longer-term bias is closer to neutral, suggesting less conviction around a sustained slowdown.
Still, traders have built up a sizable pool of puts around the $2,500 level for the Dec. 26 expiry, highlighting a key area of concern.
Beyond short-term positioning, some analysts warn that bitcoin’s long-term cycle may be changing. Bloomberg Intelligence commodities strategist Mike McGlone said the rally above $100,000 earlier this year may have planted the seeds for a much deeper pullback.
“Bitcoin’s rise toward six figures may have sparked a cycle back to $10,000, potentially in 2026,” McGlone said, arguing that periods of extreme wealth creation are often followed by strong reversals. He added that the next economic downturn could be caused by a collapse of highly speculative digital assets with effectively unlimited supply.
Despite the warning, McGlone noted that bitcoin itself has been relatively resilient, down only about 5% in 2025 through mid-December.
Still, CryptoQuant data shows that short-term holders have been racking up losses for over a month, while Glassnode estimates that long-term holders have lost approximately 500,000 BTC since July.
Meanwhile, FxPro’s Kuptsikevich said the Federal Reserve’s rate cuts this year mattered less as a direct catalyst and more as a signal that tightening was over, allowing investors to maintain risk exposure through reductions.
“That patience helped push bitcoin to new highs earlier in the year,” he said. “But leverage remains high, and the selloff in October exposed how fragile price discovery can be when positioning becomes saturated.”
Looking ahead, geopolitical risks and leverage conditions will be key factors through 2026. For now, markets appear primed for volatility, with downside risks firmly back in focus as the year draws to a close.
