December 26, 2025
Finance

Cryptocurrency Markets Face Volatility as 2025 Draws to a Close

Bitcoin and Major Altcoins Hover Amid Liquidity Concerns and Tax-Driven Selling Pressure

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Summary

As the calendar approaches the final weekend of 2025, Bitcoin and other leading cryptocurrencies are experiencing subdued price movements, reflecting investor caution amid a landscape marked by thin liquidity and tax-related selling. Market data highlights significant liquidation activity and outflows from exchange-traded funds (ETFs), while technical analysts point to key levels that could influence sentiment heading into 2026.

Key Points

Bitcoin remains steady near $87,000 amid cautious investor behavior and thin liquidity ahead of the weekend.
Significant liquidation activity noted with over 93,000 traders liquidated, summing to approximately $244 million.
Spot Bitcoin and Ethereum ETFs experienced notable net outflows of $175.3 million and $52.7 million respectively, indicating investor withdrawal from these vehicles.
New ETFs by Amplify have been launched to focus on cryptocurrency infrastructure projects rather than just coins.
Market commentators highlight tax-loss selling and holiday liquidity as factors suppressing the usual end-of-year rally in Bitcoin.
Technical levels are critical: a monthly close above Bitcoin's 20-month moving average and $90,000 would signal bullish momentum.
Bitcoin was challenged as a "store of value" in 2025, though crypto derivatives linked to precious metals posted strong returns.
Trust Wallet commits $7 million to cover user losses following a security breach, indicating increased institutional accountability.

In the concluding days of 2025, Bitcoin maintained a largely stable trading range, hovering near the $87,000 mark. This relative price inertia comes as investors exhibit caution, navigating a market environment characterized by diminished liquidity and selling activity driven by tax considerations.

Other significant cryptocurrencies mirrored this tentative sentiment. Ethereum was priced around $2,923, Solana at $122, XRP close to $1.84, Dogecoin at approximately $0.1221, and Shiba Inu near $0.0571. The collective movement of these digital assets suggests a broader market indecision as the year draws to a close.

Market surveillance data from Coinglass over the previous 24 hours recorded that 93,477 traders incurred liquidations totaling roughly $244.46 million. This sizable figure confirms heightened risk exposure and the rapid unwinding of leveraged positions amid the market's fluctuations. Additionally, SoSoValue data indicated substantial net outflows from spot cryptocurrency ETFs: $175.3 million from Bitcoin-focused products and $52.7 million from those tracking Ethereum.

Amid these noteworthy patterns, the cryptocurrency sector has also seen strategic developments. Amplify has introduced exchange-traded funds focusing on infrastructure projects within the crypto ecosystem, signaling interest in the sector's foundational technologies beyond just the native coins themselves.

Commentary from market observers includes Peter Schiff's critique of Bitcoin, referring to what he calls a "Santa rally"—a year-end price increase that some investors may be selling into. Conversely, Arthur Hayes has projected bullish long-term value for Bitcoin, forecasting a potential rise toward $750,000 by 2026 to 2027, partly attributing this to fiscal policies during the Trump administration.

Notably, Trust Wallet, owned by Changpeng Zhao, has pledged to cover losses amounting to $7 million incurred by users following a security breach. This action reflects increasing institutional responsibility amid security incidents in the crypto space.

Regarding Bitcoin's performance in 2025, analysts have assessed that it failed to establish itself as a reliable "store of value" during the year. However, certain cryptocurrency derivatives tied to precious metals like gold and silver have reportedly delivered notable returns, offering alternative avenues for investors seeking hedges or returns beyond the primary digital assets.

Technical analysis from Michael van de Poppe emphasizes the importance of Bitcoin's 20-month moving average. A monthly closing price above this level, especially surpassing $90,000, is considered essential to validate a bullish momentum. Such a development would likely catalyze a more robust start to 2026, aiming for price targets in the $105,000 to $110,000 range.

Market commentator ShardiB2 attributes the stalling of the traditional year-end rally, known as the Santa rally, primarily to tax-loss selling and reduced liquidity during the holiday season. Given that Bitcoin ranks among the limited number of major assets recording losses for the year, investors who have realized gains elsewhere might be selling Bitcoin to offset taxable profits elsewhere in their portfolios.

This dynamic has heightened downward pressure on Bitcoin's price, with $85,200 identified as a crucial support level. Breaching this could exacerbate declines, intensifying market volatility in the short term.

On a more optimistic note, trader Nebraskangooner points out that Bitcoin's monthly trend indicator has turned bullish for the first time since March 2023. This shift suggests an improving broader trend, offering reassurance despite ongoing short-term fluctuations.

Current pricing snapshot indicates Bitcoin at $87,452, reflecting a minor positive movement of 0.30%. Dogecoin has declined by approximately 1.46% to $0.1218, whereas Ethereum gained 0.72% to $2,923.54. Shiba Inu rose near 0.99% to $0.0000070, Solana appreciated by 1.54% closing at $121.85, and XRP increased by 0.94% to $1.85.

This data and market sentiment, as captured through multiple sources including Benzinga APIs, frame a cautious but watchful crypto landscape. Participants await definitive signals from price action and technical indicators that could set the tone for early 2026 trading activity.

Risks
  • Continued thin market liquidity may exacerbate price volatility and sudden moves.
  • Tax-driven selling could persist, placing downward pressure on Bitcoin and other cryptocurrencies.
  • Falling below critical support levels, such as Bitcoin's $85,200 mark, may accelerate selling.
  • Security breaches pose risks to investor assets, impacting trust and market stability.
  • Uncertainty regarding Bitcoin's acceptance as a store of value contributes to market hesitancy.
  • ETF outflows suggest waning investor interest or shifting allocation away from crypto spot exposure.
  • Near-term price volatility could complicate trend analysis and investor decision-making.
  • Crowded liquidation events implicitly increase downside risk for leveraged traders and the broader market.
Disclosure
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult financial professionals before making investment decisions.
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