Bitcoin’s Extended Downturn Signals Market Uncertainty
Bitcoin has recorded its fourth consecutive weekly decline, marking the cryptocurrency’s longest losing streak since June 2024. Despite showing signs of recovery with recent gains, the world’s largest digital asset remains on track for its worst quarterly performance since 2018, currently down 24.43% for the fourth quarter.
Federal Reserve Policy Shifts Influence Crypto Markets
The recent cautious rebound in Bitcoin prices aligns with significant repricing of Federal Reserve monetary policy expectations. Market sentiment has shifted dramatically, with odds of a December rate cut jumping from 40% last week to nearly 70% today. This policy recalibration comes as the Fed prepares to end quantitative tightening on December 1, followed by a crucial interest rate decision on December 10.
Analyst Perspectives on the Recovery
Sean Dawson, head of research at options analytics platform Derive, expressed caution about the sustainability of the current rebound. “Pessimism has peaked, but I’d be cautious of walking into a bull trap,” Dawson told Decrypt. He pointed to ongoing market pressures, including digital asset treasuries trading below net asset value and spot Bitcoin ETFs remaining in negative territory.
Options Market Signals Bearish Sentiment
The options market reveals continued bearish positioning among traders. Dawson noted a negative skew with “traders loading up on puts to protect downside,” particularly for December 2025 expiries. There’s significant put option accumulation in the $80,000 to $85,000 range, indicating expectations for further price declines.
On-Chain Metrics Suggest Potential Bottom Formation
Despite the bearish sentiment, underlying market metrics offer glimmers of hope. The aggregate spot bid-ask delta at 10% depth has surged to the second-highest level in 2025, signaling increased dip-buying activity and potential absorption of selling pressure. This same indicator previously helped form a market bottom in March and April, catalyzing a subsequent 64% bull run.
Price Projections and Market Outlook
Current trading shows Bitcoin at approximately $87,400, representing a 6% recovery from the November 21 low of $82,100. While Dawson remains optimistic for a potential recovery to $100,000 by Q1 2026, he maintains a bearish outlook for the remainder of 2025, reflecting the current market conditions for Bitcoin.. He suggests Bitcoin could briefly dip into the mid-to-high $70,000 range before recovering to around $90,000 by year-end, contingent on the Fed maintaining a dovish stance.
Key Factors to Watch
Market participants should monitor several critical developments: Federal Reserve policy decisions, particularly the December 10 rate announcement; continued options market positioning; and on-chain metrics indicating institutional accumulation. The combination of these factors will likely determine whether Bitcoin can break its current losing streak and establish a sustainable recovery trajectory heading into 2026.
