Simply put
- A major spot market index has jumped to its second-highest point this year, indicating a possible bottom.
- Options traders are taking precautions against further declines, accumulating puts in the $85,000 to $80,000 range.
- Decrypt suggests Bitcoin might dip below $80,000 before making a recovery by year’s end.
Even with Bitcoin beginning to recover from last week’s setbacks, it has fallen for the fourth consecutive week, representing the longest slump since June 2024.
The leading digital asset is on track for its worst fourth-quarter results since 2018, currently down 24.43%.
“We’re anticipating a tough Christmas,” stated Sean Dawson, head of research at a options analysis platform.
Despite these negative trends, some on-chain indicators hint at increasing demand.
The total spot buy price delta at 10% depth has surged to its second highest level this year, suggesting more bullish buying activity could be absorbing selling pressure.
This index’s previous spikes after prolonged downward trends in March and April led to significant market recoveries.
Currently, Bitcoin trades at $87,400, which is around 6% higher than its November 21 low of $82,100, and it’s risen approximately 1.8% in the last 24 hours, according to CoinGecko.
This recovery aligns with a notable shift in Federal Reserve policy, where the chance of a rate cut in December has increased from 40% to nearly 70% in a week.
Yet, Dawson remains cautious about a rebound. “Pessimism has peaked, but we must be wary of slipping into a bull trap,” he cautioned.
He highlighted ongoing market pressures; notably, many digital asset bonds are trading beneath their net asset value, making accumulation difficult. Spot Bitcoin and Ethereum exchange-traded funds are similarly struggling.
Despite the heightened likelihood of a rate cut, “fears of persistent inflation” are still causing concern, as the shift towards quantitative easing is slower than expected, according to the analyst.
What’s next?
Dawson expresses some hope for Bitcoin reaching $100,000 by the first quarter of 2026 but remains bearish about the rest of 2025.
He pointed out a negative sentiment in the options market; traders are gathering puts for downside protection, particularly focused on December 2025 expiry and accumulating in the $80,000-$85,000 range.
“If the Fed doesn’t take a hawkish stance, I wouldn’t be surprised to see Bitcoin dip into the mid-to-high $70,000 range before bouncing back to around $90,000 by year-end,” he mentioned.
Overall sentiment is in “extreme fear,” though it’s improved a bit following the rebound over the weekend.
Upcoming Federal Reserve policy decisions, especially the end of quantitative tightening on December 1 and interest rate decision on December 10, may greatly influence Bitcoin and broader financial markets in the near future.
