Bitcoin extended its decline on Thursday, slipping below $90,000 trading hours despite a widely expected Federal Reserve rate cut and a more optimistic macro outlook from policymakers.
The move underscores a deepening decoupling between crypto and the broader risk-asset rebound, as structural selling and thin year-end liquidity continue to pressure prices.
BTC fell as much as 2.7%, briefly touching the $89,000 area before stabilizing. Ether, XRP, and Solana mirrored the drop. The downturn follows a multi-week slide triggered in early October by a historic liquidation event that erased nearly $19 billion in leveraged Bitcoin positions.
Fed Cut Sparks Options Activity, But Not a Rally
The rate cut coincided with a sharp rise in bullish options activity, led by the $100,000 December 26 call, now the most traded strike in the market. According to Laevitas, open interest shows:
- •18,360 call contracts at the $100K strike
- •Only 2,540 puts
But analysts emphasize that traders are not pricing in a breakout. Most positions are structured as call spreads and condors, strategies that cap potential upside.
“Markets are positioning for a tactical bounce, not a Santa rally,” one derivatives desk noted.
Even Bitcoin’s 25-delta skew, which improved from -8% to -5%, remains in negative territory, a sign traders continue to pay a premium for downside protection.
Fed Adds Liquidity, But Crypto Still Weakens
Alongside the rate cut, the Fed confirmed it will begin purchasing $40 billion per month in short-term Treasury bills to stabilize liquidity. Yet this injection has not translated into crypto strength.
Bitcoin’s intraday move faded quickly after the announcement, and it now trades almost 5.5% below Wednesday’s high of $94,267.
CryptoQuant estimates that any relief rally is likely capped around $99,000.
Analysts Point to Seasonal Liquidity Collapse
Historically, December is one of the weakest liquidity periods for crypto markets, and 2025 appears no different.
“With Christmas and year-end settlement approaching, this period historically marks the weakest liquidity conditions in crypto,” said Adam Chu, chief researcher at GreeksLive.
Low implied volatility, reflecting muted expectations for short-term price swings, also suggests limited enthusiasm for a holiday rally.
Instead, options data shows traders are shifting their biggest bullish bets to Q1 2026, where heavy call positioning builds at $130K and $180K for March expiry.
ETF Flows Slow as Treasury Buyers Step Back
Bitcoin ETFs have become a key foundation of demand this cycle, but inflows have slowed sharply. According to Glassnode:
- •BTC ETF demand now sits near aggregate breakeven, limiting buyers’ urgency.
- •Two previous 30% corrections (2024 and early 2025) bottomed near this same ETF cost basis.
Meanwhile, long-term Bitcoin treasuries, previously a major price support, have recorded the lowest level of new purchases in all of 2025.
Whales Still Accumulating, But Overpowered by Sellers
Large players are still adding. Michael Saylor’s Strategy Inc. bought 10,624 BTC between Dec. 1 and Dec. 7, worth roughly $963 million, marking its largest purchase since July.
But even billion-dollar inflows aren’t enough.
“Demand is being overwhelmed by structural selling,” said Sean McNulty, APAC derivatives lead at FalconX.
He identifies $88,500 as the next key support, with $85,000 as the “line in the sand” that must hold.
Standard Chartered Cuts Its Bitcoin Forecast
Adding to the gloomy tone, Standard Chartered slashed its 2025 year-end Bitcoin target to $100,000, down from $200,000. The bank still sees BTC at $500,000, but pushed the timeline from 2028 to 2030.
This shift follows a worsening fourth quarter where Bitcoin dropped sharply after failing to maintain new all-time highs set in early October.
Why Bitcoin Is Falling
Structural Selling After October’s Massive Liquidation
The $19B wipeout continues to haunt markets, with sentiment still unrecovered.
Weak Seasonal Liquidity
December is historically the calmest, thinnest month for crypto, amplifying volatility.
ETF Inflow Slowdown
ETF demand has dropped sharply, removing one of BTC’s strongest supports.
Options Market Pricing Limited Upside
Call spreads dominate — traders do not expect a major rally in December.
Macro Uncertainty Despite the Rate Cut
The Fed’s unclear December path, US government shutdown, and global trade tensions keep risk appetite muted.
What Comes Next?
According to Derive’s Sean Dawson:
“The chance of Bitcoin settling above $100,000 by Christmas now sits around 24%.”
Most analysts agree that early 2026 holds stronger bullish potential. Leveraged call positioning for March suggests traders expect:
- •Higher liquidity
- •Renewed ETF inflows
- •A recovery phase after structural selling exhausts
But for now, the market remains fragile.