Cryptocurrency markets remain under pressure as Bitcoin hovers near $87,000, with options positioning and analyst commentary pointing to rising risks of further economic downturn into early 2026.
As CoinDesk reported on Wednesday, the recent rally appears to be losing steam, with price action increasingly being determined by brief rallies and subsequent selloffs.
Bitcoin briefly climbed to $90,000 late Wednesday before falling back below $87,000, underperforming stocks amid the latest round of macro uncertainty. Traders are increasingly bracing for further losses, especially around the Dec. 26 options expiration.
Data from the derivatives market shows a massive increase in put options at the $85,000 strike price, signaling expectations that Bitcoin could fall below that level in the near term.
Derive.xyz said in an email to CoinDesk that thirty-day implied volatility has climbed to 45%, while skewness remains negative, reflecting the need for downside protection. The longer-term bias has also stabilized around -5%, suggesting bearish sentiment will continue into the first half of next year.
“Defensive positioning is clear towards the end of the year,” said Alex Kuptsikevich, chief market analyst at FxPro. “The uptrend established in late November has been broken, and the market is now trading more like it did during the October sell-off, with the sharp rebound failing to gain traction.”
The situation with Ethereum is slightly more balanced. While the short-term ETH bias remains negative, the long-term bias is closer to neutral, indicating less confidence in a continued downturn.
Nonetheless, traders have accumulated a large number of put options near the $2,500 level on the December 26 expiry, highlighting a key area of concern.
Beyond its near-term positioning, some analysts are warning that Bitcoin’s long-term cycle may be shifting. Bloomberg Intelligence commodities strategist Mike McGlone said the rally above $100,000 earlier this year may have planted the seeds for a deeper pullback.
McGlone said: “Bitcoin’s surge into six figures could trigger a cycle back to $10,000, possibly in 2026.” He believes that extreme periods of wealth creation are often followed by sharp reversals. He added that the next recession could be caused by the collapse of highly speculative, virtually infinite supply digital assets.
Despite the warning, McGlone noted that Bitcoin itself is relatively resilient, only down about 5% through mid-December in 2025.
Nonetheless, data from CryptoQuant shows that short-term holders have been losing money for more than a month, while Glassnode estimates that long-term holders have lost approximately 500,000 BTC since July.
Meanwhile, FxPro’s Kuptsikevich said the Fed’s rate cuts this year are less a direct catalyst than a signal that tightening is over, allowing investors to hold exposure through pullbacks.
“This patience helped Bitcoin reach new highs earlier this year,” he said. “But leverage remains high, and October’s wave of liquidations exposed how fragile price discovery can be when positions are crowded.”
Looking ahead, geopolitical risks and leverage conditions will be key drivers in 2026. For now, markets appear to be braced for volatility, with downside risks firmly back in focus as we head into the year.