BTC market faces a dilemma; by the end of the year, there was no Christmas rally, but instead a break below support

The entire cryptocurrency market’s BTC trend was stagnant until the end of last year, with Bitcoin repeatedly fighting to break through the $90,000 mark. The previous brief rebound almost fully gave back its gains. Although the Federal Reserve announced a rate cut as expected, market risk sentiment continued to weaken, and the selling pressure from “price in good news” remained heavy. As of now, Bitcoin’s price stays around $90,000, with a 24-hour increase of +0.79%.

Major mainstream cryptocurrencies continued their correction, with over $500 million in leveraged positions liquidated within just 24 hours, rapidly increasing market volatility. This correction occurred after Bitcoin briefly broke through $94,000. Although it triggered some short covering, the bulls lacked follow-through and failed to break through the upward channel that had been under pressure for several weeks, ultimately pushing the price back into a nearly one-month consolidation range.

Technical Pressure: Short-term Support Zones Under Multiple Tests

FxPro senior analyst Alex Kuptsikevich observed that since mid-November, Bitcoin’s local highs and lows have gradually risen. However, he emphasized that to confirm a genuine rebound and capital growth, the overall cryptocurrency market capitalization must break through the $3.32 trillion threshold, about 6% higher than the $3.16 trillion market cap at that time.

Currently, the focus of BTC is on the short-term support zone between $90,000 and $91,000, which has been tested multiple times over the past month. If this support is broken effectively, the price could further decline toward the lower end of the range; conversely, if it holds, there may be a chance to challenge the $94,000 resistance zone.

Leverage Liquidation Triggers Chain Selling Pressure

One of the main drivers of this decline is the rapid liquidation of leveraged positions. According to CoinGlass data, in the past 24 hours, $376 million in long positions were forcibly liquidated, nearly three times the $138 million in short positions. This wave of liquidations expanded quickly after Bitcoin broke below its short-term upward channel, creating a chain reaction of selling pressure.

Another pressure on BTC comes from deteriorating liquidity conditions. QCP Capital recently warned clients that Bitcoin might continue to fluctuate between $84,000 and $100,000 before the end of the year, mainly due to reduced market liquidity and increased imbalance in position allocation.

Macro Environment Weakening: Bearish Sentiment Expected by Year-End

Although the Federal Reserve announced a rate cut as expected, officials indicated that the magnitude of future rate cuts over the next two years would decrease. This reveals internal disagreements within the Fed regarding inflation and economic outlooks, and market confidence in policy direction has not effectively coalesced. The initially anticipated policy tailwinds have ultimately been priced in as market consensus.

Bloomberg Intelligence senior strategist Mike McGlone’s outlook is even more pessimistic. He explicitly warned that the “Santa rally” investors expected did not materialize as planned, and predicted Bitcoin could fall below $84,000 by the end of the year. This forecast aligns with the actual market trend, reflecting institutional investors’ cautious attitude toward BTC’s future prospects.

The current market is testing a critical boundary between bulls and bears. Whether BTC can hold the support zone between $90,000 and $91,000 will be key to determining the short-term direction. Investors are closely watching whether this range can be defended; otherwise, further declines are likely.