Bitcoin traders are making a final attempt to salvage the year's performance, but their efforts have once again hit a formidable wall at the US$90,000 price point. For the second day in a row, the world's leading digital currency has seen its rally stall as it approaches this key psychological level, dashing hopes for a dramatic year-end recovery.
A New Trading Range Emerges
Following a significant crash in October, Bitcoin has now settled into a relatively stable but disappointing trading band. The token is fluctuating between roughly US$85,000 and US$95,000, a far cry from its all-time high achieved earlier in the year. This consolidation phase has put Bitcoin on a clear trajectory toward closing the year in negative territory, which would mark its first annual loss in three years.
Currently, Bitcoin is down approximately five percent since December 2024. This decline is a stark reversal from its position in early October, when it was up around 30 percent for the year and had reached a record peak.
Market Turbulence and ETF Outflows Weigh Heavy
The cryptocurrency's turbulent year began with optimism, fueled by expectations of crypto-friendly policies from the second Trump administration. However, that sentiment was quickly overshadowed by market-wide uncertainty. U.S. President Donald Trump's tariff policies shook global financial markets, impacting risk assets across the board.
While other assets, like U.S. stocks, have managed to recover from the volatility, Bitcoin has struggled to climb out of the red. A major contributing factor was the record level of leveraged positions liquidated on October 10, which created a massive sell-off and shattered investor confidence.
Adding to the downward pressure is a significant shift in institutional interest. Demand for Bitcoin exchange-traded funds (ETFs) has dried up, turning into a sustained period of outflows. According to data from Bloomberg Intelligence, outflows from Bitcoin ETFs have now reached a staggering US$6 billion in the fourth quarter alone, coinciding with the token's inability to sustainably break above the US$90,000 threshold.
Expect Volatility as Liquidity Dries Up
With the New Year's holiday approaching, market analysts are warning traders to brace for erratic price movements. Jasper De Maere, a desk strategist at market maker Wintermute, cautioned in a note on Tuesday that investors should "continue to expect exaggerated moves on light flow through New Year's".
De Maere advised market participants to "avoid over-fitting to very short-dated signals until liquidity normalizes," suggesting that the current thin trading volumes could lead to misleading and amplified price swings that may not indicate a longer-term trend.
As the final trading days of 2025 slip away, Bitcoin remains trapped below a key resistance level, its fate for the year all but sealed. The combination of geopolitical uncertainty, massive ETF withdrawals, and the aftermath of October's leverage purge has created a perfect storm, halting the digital asset's historic bull run and setting the stage for a cautious start to 2026.
