Wall Street Year-End Celebration: Why Is Bitcoin Sitting Alone at $87,000 During the "Christmas Rally"?

By the end of 2025, the global financial markets are immersed in an optimistic “Christmas rally” atmosphere: the US S&P 500 index hit a new closing high, gold prices broke through $4,500 per ounce, setting a record, and the annual gain is expected to be the best since 1979. However, Bitcoin, once highly anticipated, appears out of place, with its price hovering between $85,000 and $90,000, nearly stagnant, down over 7% this year, and possibly recording its worst performance since the TerraUSD collapse in Q2 2022.

Analysis indicates that Bitcoin has failed to keep pace with the rising risk appetite in the stock market or attract safe-haven inflows from gold, falling into an awkward “neither here nor there” situation. The reasons include the breach of technical support levels, market freeze caused by over $23 billion in options expiring, and ongoing selling by long-term holders coupled with a drying up of ETF inflows, collectively leading to a “silence” in the market amid a lack of clear buying interest.

Market Polarization: Why Is Bitcoin Absent from the “Christmas Rally”?

As Wall Street traders prepare Christmas decorations and the stock market delivers holiday gifts with the classic “Santa Claus rally,” the flagship asset of the crypto world feels a chill. As of the latest trading data, Bitcoin hovers around $87,370, firmly locked in a narrow range between $85,000 and $90,000, like a ship losing momentum on a calm sea, starkly contrasting with the exuberance of surrounding markets.

This weakness is not a recent phenomenon. Since a significant retreat from its all-time high in October 2025, Bitcoin has fallen about 30%, with momentum completely exhausted, and the market struggling to find footing. Trading volume has thinned, and retail speculative enthusiasm has notably waned. More critically, the key engine that drove the bull market—the US spot Bitcoin ETF—has turned net sellers in Q4, removing an important demand source. Timothy Mischer, research director at digital asset analysis firm BRN, succinctly states: “Hard assets are attracting capital as long-term hedges, while crypto assets are being sidelined.”

In contrast, other markets tell a different story. The US stock market continues to soar, with the S&P 500 hitting new records, rewarding momentum traders focused on tech stocks. Meanwhile, gold, the oldest safe haven, has risen above $4,500 per ounce to a new all-time high, reinforcing its dual role as a hedge against uncertainty and a store of value. According to Bloomberg data, gold has gained over 70% this year, potentially marking its best annual performance since 1979 and the second-strongest annual gain in over a century. Bitcoin’s situation is particularly awkward: at the start of 2025, it rose in tandem with stocks as a typical risk asset, but now it has failed to join the year-end rally; despite being promoted as “digital gold,” it has not attracted defensive capital flows that push up precious metals. The result is silence, with a decline of over 7% for the year, far from the new cycle of maturity and mainstream acceptance many anticipated.

Technical and Derivative Factors: How Double Locks Freeze the Bitcoin Market?

Bitcoin’s current stagnation partly stems from specific technical and derivatives market constraints. First, a key technical support level has been breached. Bitcoin’s price has fallen below its 365-day moving average (currently around $102,000), which has historically played a critical support role in this cycle. Failing to reclaim this threshold increases the risk of further deep corrections and undermines short-term bullish confidence.

More directly freezing is the massive options expiry scheduled for later this week, with a notional value exceeding $23 billion. Such a large expiry typically forces market makers to perform complex hedging operations, greatly limiting directional bets and reinforcing the current stalemate. Traders tend to reduce positions ahead of major risk events, adopting a wait-and-see approach, which directly leads to decreased volatility and lower trading volumes.

Current Main “Freeze” Factors in the Bitcoin Market

• Technical Breakdown: Price falls below the $102,000 support level, breaching the 365-day moving average.
• Derivatives Pressure: Over $23 billion in options approaching expiry, suppressing market directionality.
• Liquidity Environment: Year-end holiday season causes market liquidity to thin significantly, amplifying price swings.
• Core Issue: Lack of clear buyers willing to step in at current levels.

Additionally, the holiday season’s inherent liquidity constraints further suppress market activity. But all these factors highlight a deeper issue: the market lacks a clear buyer willing to step up at this moment. Whether long-term investors waiting for lower prices or regulated institutions constrained by compliance, the current stance is one of cautious observation. This vacuum of buying interest causes any rebound attempts to quickly fizzle out due to lack of follow-through, resulting in sideways trading within a weak range. This “triple lock”—comprising technical levels, derivatives events, and seasonal factors—temporarily traps Bitcoin in its current position.

Capital Flows: Long-term Holders Selling and Institutional Funds Retreat

Beyond technical constraints, structural shifts in capital flows are a deeper reason for Bitcoin’s weakness. A persistent drag is the steady selling by long-term holders. Pratik Kala, portfolio manager at hedge fund Apollo Crypto, points out that Bitcoin’s price action this year has been disconnected from the “extremely bullish news cycle” surrounding the asset. He attributes this gap to ongoing distribution (cash-out) by early holders and multiple forced sales, including the sharp decline in October, which collectively hinder sustained rebounds.

Kala believes that much of this selling pressure has now been exhausted, and Bitcoin is “trading within a value range,” potentially laying the groundwork for stronger performance next year. However, this “rotation” process has undoubtedly suppressed prices in the short term. Early investors transferring chips to new entrants or traders may set the stage for healthier gains later, but the process itself involves pain.

On the other hand, the spot Bitcoin ETF, often seen as a barometer of institutional demand, has experienced a worrying reversal in fund flows. In Q4, these products have turned net outflows, contrasting sharply with the inflows seen earlier in the year. This suggests some institutional funds are taking profits or temporarily retreating to reassess positions or manage year-end liquidity. The waning institutional buying removes a stable and strong demand source that supported the bull market, making the market more susceptible to selling pressure.

Overall, the market is in a “transition phase”: early investors’ profit-taking has not fully concluded, and new large-scale institutional or retail enthusiasm has yet to reignite. With the “digital gold” narrative temporarily failing (funds flowing into physical gold) and the “tech risk asset” narrative also hindered (lagging behind the Nasdaq), Bitcoin has temporarily lost a clear story to attract incremental capital. This narrative vacuum, combined with actual selling pressure, creates a sense of powerlessness in the current market.

Silence as Value: Can Bitcoin Turn Around in 2026?

Despite the current disheartening silence, the cyclical nature of markets and some professional investors’ analyses suggest a potential turnaround in 2026. The current “quiet period” can be viewed as a necessary stress test and market restructuring. Sharp price corrections and deleveraging have squeezed out bubbles and instability. The ongoing distribution by early holders, while suppressing prices, also shifts chips from “weak hands” (short-term speculators) to potential “strong hands” (new long-term holders or institutions), a typical feature of market bottoms.

Pratik Kala from Apollo Crypto emphasizes the “value range” perspective. If Bitcoin’s current price has fully absorbed selling pressure, macro concerns, and narrative fatigue, it might be forming an attractive long-term entry point. Historically, after significant corrections and prolonged consolidation, Bitcoin tends to accumulate strength for a new upward phase. Key catalysts could include: first, a shift in macro monetary policy—if the Fed pivots to easing to support the economy, liquidity will flow into all risk assets, including crypto; second, breakthroughs in industry innovation, such as new mainstream applications or clearer global regulatory frameworks; third, renewed capital inflows into traditional financial products, like sustained ETF growth or approval of new types of products.

For investors, a more patient and selective approach may be prudent now. Until clear technical breakout signals (e.g., volume confirming a move above the 365-day moving average) or fundamental catalysts emerge, the market may continue to oscillate. Incorporating Bitcoin into diversified portfolios and deploying phased buy strategies within the current “value range” could be a cautious way to hedge uncertainty. Additionally, closely monitoring capital flows—especially whether ETF funds resume net inflows—and on-chain data indicating long-term holders cease selling and start accumulating are key indicators. The “silence” at the end of 2025 might be a preparatory phase for a louder 2026. The market’s focus has never truly shifted away; it’s just waiting for a compelling reason to press the start button again.