Crypto markets fell on Sunday as a broader pullback in risk assets extended into the last full trading week of the year, with investors remaining cautious amid concerns about technology valuations, fading momentum in U.S. stocks and mixed signals from the Federal Reserve.
Bitcoin fell around 0.5% to trade near $89,600, sitting just above last week’s lows, while ether dipped slightly to around $3,120. Most major tokens traded lower on the day, with XRP, Solana, and Dogecoin posting losses of up to 2%, according to market data.
The move came as U.S. stock index futures rebounded modestly after last week’s tech-led sell-off, which was sparked by renewed scrutiny over heavy spending on artificial intelligence and the sustainability of profits.
While S&P 500 and Nasdaq 100 futures rose about 0.2% in Asian morning hours on Monday, risk appetite remained fragile as investors reassess whether lofty valuations for tech stocks can be justified through 2026.
That caution has extended to crypto markets, which have struggled to regain momentum after October’s sharp decline. Trading volumes have decreased noticeably in recent sessions, amplifying price movements and reinforcing a defensive tone.
“Right now, investors are hesitant to invest in cryptocurrencies given the October crash, concerns about an overvalued US stock market, and mixed signals from the Federal Reserve,” Jeff Mei, chief operating officer of cryptocurrency exchange BTSE, said in a Telegram message.
“That said, Bitcoin ETF inflows remain net positive and the Federal Reserve has begun buying back securities in the market, adding liquidity that could flow into stocks and cryptocurrencies,” he added.
Mei added that year-end positioning is likely driving the current weakness. “Given that it is the end of the year, traders are likely taking profits now and will re-evaluate whether they want to initiate new crypto positions in early 2026,” he said.
Others warned that tight liquidity could exaggerate downward moves in the coming weeks.
“This morning’s cryptocurrency sell-off is a continuation of Friday’s negative bias and we would expect major currencies to continue leading the way lower,” said Augustine Fan, head of analysis at SignalPlus. “As trading volumes have decreased significantly since the 10/10 event and sentiment has turned broadly negative, BTC and ETH are expected to act as a hedging indicator for all other tokens as traders adjust exposures.”
Fan cautioned against overinterpreting short-term price swings. “We wouldn’t read too much into these tight conditions on a day-to-day or hour-to-hour basis, but overall sentiment remains deeply negative and the path of least resistance likely points to weaker prices toward the end of the year,” he said.
Despite the near-term pressure, US-listed bitcoin ETFs and continued liquidity support from central banks could provide a more constructive backdrop once markets fully reopen in early 2026.
