Bitcoin trades slightly above $88,290 after a recent high above $126,000 in October, raising concerns about a deeper pullback. Analyst Ali Martinez compares past cycles—1,064 days from bottom to top and about 364 days back to a low—and infers a potential bottom around October 2026, with downside near $37,500 based on prior drawdowns.

Bitcoin has closed 2025 in an "extreme fear" zone, after dropping 23% in Q4, its second-worst fourth quarter on record. Changpeng Zhao has pointed to previous fear phases in 2024 and early 2025, when BTC later rallied from around $54K and $77K to over $100K and $126K. Miners' positioning and production-cost levels near $80K currently show limited selling pressure, suggesting room for recovery if demand returns, though analysts remain split on Bitcoin's path into 2026.

Bitcoin's price is now more heavily influenced by derivatives markets than by spot trading, according to CoinGlass. The report notes that futures, perpetual swaps, and options account for most trading activity, with derivatives volumes consistently exceeding spot across rallies and corrections. As a result, short-term price direction is increasingly driven by leverage, positioning, and hedging behavior rather than direct spot buying or selling.

According to the Bitcoin Fear & Greed Index, market sentiment has stayed in the extreme fear band for 13 consecutive days while Bitcoin is trading around $87,500. The gauge, which aggregates market cap dominance, volume, Google Trends, social activity, and volatility into a 0–100 score, currently sits at 23, marking a prolonged period of pessimism. Historically, major tops and bottoms have often formed when the index sits in its extreme zones, but it is still unclear whether the latest stretch will mark a decisive cycle low.

On 25 December 2025, Michael Saylor outlined a 2026 Bitcoin outlook that centers on U.S. banks expanding lending and custody services around the asset. He argues that clearer regulation, Bitcoin-backed credit, and institutional custody from major banks could shift Bitcoin from a niche holding into a mainstream financial instrument and support the next bull phase.

This week, regional Bitcoin flows split as US trading hours showed persistent net selling while Asian sessions captured most of the buying. At the same time, cycle charts indicated the current market phase still mirrors prior bull and consolidation patterns, and a Glassnode capitulation gauge shared by Gordon Gekko jumped to its highest level on record as price slid from above $110,000 toward $100,000 in late 2025.

On December 25, 2025, Blockstream CEO Adam Back argued that Bitcoin need not be redesigned to counter hypothetical quantum threats, saying Taproot's key tweak was recently proven post‑quantum secure. He suggested deprecating key‑path spends if CRQC ever emerged and criticized hash‑only formats, while BIP 360 advocates push stronger guarantees despite potential feature trade‑offs.

A Bitcoin wallet dormant for eight years moved 400 BTC worth around $34.92 million to OKX, realizing an estimated $30.4 million profit. On chain records indicate the wallet previously received two 200 BTC deposits from HTX and executed the transfer roughly 11 hours before it was noted publicly, amid rising whale activity.