Crypto markets continued to face pressure as bitcoin lingered around $87,000, with options positioning and analyst insights indicating increasing risks of a more significant downturn into early 2026.
The recent recovery seems to be losing steam, characterized by brief price increases followed by fresh selling, as CoinDesk highlighted on Wednesday.
Bitcoin made a fleeting rise to $90,000 late Wednesday before falling back below $87,000, trailing behind equity markets amid ongoing macro uncertainty. Traders are increasingly bracing for more declines, especially with the Dec. 26 options expiry approaching.
Data from derivatives markets reveals a significant accumulation of put options at the $85,000 strike, implying expectations that bitcoin may drop beneath that threshold in the near future.
Thirty-day implied volatility has surged to approximately 45%, as noted by Derive.xyz in an email to CoinDesk, while skew remains decidedly negative, suggesting a heightened demand for downside protection. Longer-dated skew also hovers around -5%, signaling that bearish sentiment extends into the first half of the coming year.
“There’s evident defensive positioning as we approach year-end,” stated Alex Kuptsikevich, chief market analyst at FxPro. “The uptrend established in late November has been disrupted, and the market is now behaving similarly to the October sell-off, with sharp recoveries failing to sustain.”
Ether displays a somewhat more balanced profile. While short-term ETH skew remains negative, the longer-dated skew edges closer to neutral, indicating less certainty about a prolonged downturn.
Nevertheless, traders have amassed a considerable volume of puts around the $2,500 mark for the Dec. 26 expiry, underscoring a critical area of concern.
Beyond the immediate outlook, some analysts caution that bitcoin’s long-term cycle might be shifting. Bloomberg Intelligence commodities strategist Mike McGlone remarked that the surge past $100,000 earlier this year could have set the stage for a much steeper retracement.
“Bitcoin’s climb toward six figures may have triggered a cycle back toward $10,000, potentially in 2026,” McGlone asserted, suggesting that periods of extreme wealth creation are frequently followed by sharp reversals. He added that the next economic downturn may be driven by a collapse in highly speculative digital assets with virtually unlimited supply.
Despite the caution, McGlone observed that bitcoin itself has shown relative resilience, down only about 5% in 2025 through mid-December.
However, data from CryptoQuant indicates that short-term holders have been experiencing losses for over a month, while Glassnode estimates long-term holders have offloaded approximately 500,000 BTC since July.
Meanwhile, FxPro’s Kuptsikevich noted that the Federal Reserve’s rate cuts this year hold less significance as a direct catalyst and more as a sign that tightening is over, allowing investors to maintain risk exposure during drawdowns.
“This patience contributed to pushing bitcoin to new highs earlier in the year,” he explained. “Yet leverage remains high, and the October liquidation wave revealed how delicate price discovery can be when positioning becomes crowded.”
Looking ahead, geopolitical risks and leverage conditions will be pivotal influences as we move toward 2026. Currently, markets appear set for volatility, with downside risks sharply in focus as the year approaches its conclusion.
