Bitcoin extended its December decline on Tuesday, trading below $88,000 as year-end selling pressure intensifies. The world's largest cryptocurrency has dropped nearly 9% this month, turning what was a strong 2025 into a challenging finish. With thin holiday liquidity exacerbating price swings, traders are bracing for continued volatility through year-end.

Current Market Conditions

Bitcoin key levels as of December 24:

  • Current price: Approximately $87,000
  • December decline: Down nearly 9%
  • Below key averages: Trading under 50-day and 200-day moving averages
  • Total crypto market cap: $2.97 trillion, down 1.4% in 24 hours

What's Driving the Weakness

Tax-loss harvesting: Analysts at digital asset hedge fund QCP Capital flagged tax-loss selling as a primary driver. Investors are selling underwater positions to realize losses and reduce tax liabilities before year-end.

Thin liquidity: Holiday trading conditions have amplified price movements. With institutional traders on vacation, smaller trades can move markets more than usual.

Fund outflows: Crypto investment products saw significant redemptions last week. Bitcoin products experienced $460 million in outflows, while Ethereum funds shed $555 million.

Technical breakdown: Bitcoin has failed to maintain levels above $90,000, breaking below key moving averages that now act as resistance.

Q4 2025: Crypto's Worst Quarter in Years

The final quarter of 2025 has been challenging for cryptocurrency investors:

  • Bitcoin has posted its worst Q4 performance in nearly a decade
  • The pullback from all-time highs near $126,000 has been steep
  • Volatility has spiked to levels not seen since April 2025

Altcoins Under Pressure

Major altcoins have fared even worse than Bitcoin:

  • Ethereum (ETH): Trading weakness as ETF outflows mount
  • Solana (SOL): One of the few seeing inflows, up $49 million
  • XRP: Also bucking the trend with $63 million in inflows

The Bull Case for 2026

Despite near-term weakness, bulls remain optimistic about Bitcoin's longer-term prospects:

VanEck's outlook: In its newly released 2026 forecast, the asset manager argues Bitcoin could be positioned for a meaningful rebound. "The current weakness may be temporary, reflecting year-end dynamics rather than fundamental deterioration."

Institutional adoption: Vanguard's recent decision to allow 50 million customers access to Bitcoin ETFs signals continued mainstreaming of cryptocurrency.

Citi's price target: The bank recently projected Bitcoin could hit $143,000 within 12 months if adoption trends continue.

What to Watch

Key factors for crypto investors to monitor:

  • January effect: Historically, crypto has rallied in January as new money enters the market
  • ETF flows: Whether outflows reverse when institutional traders return
  • Technical levels: $85,000 support, $90,000 resistance
  • Macro environment: Fed policy and dollar strength impact crypto valuations

The Bottom Line

Bitcoin's December struggles reflect typical year-end dynamics rather than a fundamental shift. Tax-loss harvesting, thin liquidity, and profit-taking after a strong year have combined to pressure prices below $88,000. Bulls expect a bounce once the calendar turns and institutional investors return in January. For patient investors, the current weakness may present an opportunity—but expect volatility to persist through the holiday period.