Bitcoin delivered another volatile session on December 29, surging above $90,000 during Asian trading hours before reversing course and tumbling below $88,000 as U.S. equity futures weakened. The dramatic $2,600 rally in just four hours triggered over $102 million in short liquidations, but gains evaporated as the cryptocurrency's tight correlation with Nasdaq futures reasserted itself.

The Volatile Session

Bitcoin's price action on December 29:

  • Asian session high: Above $90,200
  • Peak gain: +3.1%
  • Short liquidations: Over $102 million
  • U.S. session low: Below $88,000
  • Market cap swing: $80 billion added, then partially lost

The reversal came as Nasdaq 100 futures turned negative, highlighting Bitcoin's increasingly tight correlation with technology stocks.

The Correlation Problem

Bitcoin's relationship with traditional risk assets has become a defining feature:

The pattern: When Nasdaq futures weaken, Bitcoin follows—often with greater magnitude. Today's session demonstrated this clearly as the cryptocurrency gave back gains the moment U.S. equity futures dipped.

Why it matters: Investors who bought Bitcoin for portfolio diversification are finding it offers little protection during risk-off periods. The "digital gold" narrative has given way to "leveraged tech stock" behavior.

The data: Bitcoin's 90-day correlation with the Nasdaq has hovered near 0.7—indicating strong positive correlation—for most of the fourth quarter.

Year-End Pressure Mounts

Bitcoin faces a critical few days to avoid an unwanted record:

  • 2025 open: $93,374
  • Current price: ~$88,000
  • Required rally: 6.24% to close positive
  • Trading days remaining: 2
  • Stakes: First negative post-halving year in history

Every previous Bitcoin halving year has seen the cryptocurrency finish higher. A negative 2025 would break that streak and potentially damage the "halving = bull market" narrative that has attracted institutional capital.

Tax-Loss Selling Pressure

An interesting dynamic has emerged in recent sessions:

U.S. timezone underperformance: Bitcoin has consistently weakened during American trading hours while performing better in Asian sessions.

Likely cause: Year-end tax-loss harvesting by U.S. investors. Those who bought at higher prices are selling to realize losses before the December 31 deadline.

Expected end: This technical selling pressure should dissipate after New Year's Day.

Technical Levels to Watch

Crypto analyst Michaël van de Poppe outlined key levels:

  • Range: $86,500 to $90,000
  • Critical support: $86,500 (multiple tests weakening it)
  • Next support if broken: $83,000-$80,000
  • Resistance: $92,000-$95,000

"Another test of the lower end of that range would be important because repeated retests can weaken support over time," van de Poppe noted.

Altcoin Performance

Major altcoins initially rallied alongside Bitcoin before retreating:

  • Ethereum: Briefly up 3%+ before giving back gains
  • XRP: Supply tightening amid ETF buying surge
  • Solana: Showed relative strength in Asian trading
  • Total crypto market cap: Briefly reclaimed $3 trillion before retreating

Corporate Bitcoin Holders Under Pressure

The year-end crypto weakness is impacting companies with significant Bitcoin exposure:

MicroStrategy: Shares have pulled back from highs as Bitcoin underperforms.

Other corporate holders: Companies that followed MicroStrategy's playbook are seeing their Bitcoin bets questioned as the "digital gold" premium evaporates.

Fears of a bubble are reviving among skeptics who point to the gap between Bitcoin's price and traditional valuation metrics.

2026 Outlook

Despite near-term pressure, bulls see catalysts ahead:

  • ETF infrastructure: Spot Bitcoin ETFs have $120 billion+ in assets, ready for inflows when sentiment shifts
  • Halving effect: Supply squeeze typically plays out over 12-18 months
  • Regulatory clarity: CLARITY Act could provide certainty in 2026
  • Citi target: $143,000 within 12 months

The Bottom Line

Bitcoin's volatile December 29 session—surging to $90,200 before tumbling to $88,000—illustrates the cryptocurrency's current predicament. Tight correlation with Nasdaq futures means Bitcoin offers little diversification when investors need it most. Year-end tax-loss selling is adding technical pressure that should fade after January 1. The question now is whether Bitcoin can rally 6.24% in two trading days to avoid its first negative post-halving year. For investors, the near-term noise matters less than the long-term infrastructure: ETFs, institutional adoption, and halving dynamics that could drive 2026 higher regardless of where 2025 closes.