Although the Federal Reserve is anticipated to reduce interest rates by 25 basis points, both Bitcoin and alternative cryptocurrencies have seen a downturn. The cryptocurrency market’s risk appetite has diminished, causing Bitcoin to pull back toward the $90,000 mark.
After briefly surpassing $94,500 on Tuesday, Bitcoin experienced a retracement that triggered a short squeeze. However, it was unable to overcome the resistance level that has constrained its price for nearly three weeks. This rejection pushed BTC back into the midpoint of its trading range—a zone it has occupied for about a month.
Consequently, hopes for a Christmas season rally in Bitcoin have been deferred.
Data indicates that optimism surrounding a year-end surge in the Bitcoin options market has weakened significantly. Instead, major bullish positions are now being placed with an eye toward the first quarter of 2026.
Bitcoin options traders are adjusting their outlooks by scaling down expectations for any Santa Claus rally and concentrating on potential gains during early 2026.
The current sentiment among these traders targets Bitcoin prices between $130,000 and $180,000 within Q1 of 2026.
Sean Dawson, head of research at Derive Markets, commented: “There is roughly a 24% probability that Bitcoin will hold above $100K before this year ends.”
Market analysts attribute the unlikely occurrence of an imminent Christmas rally primarily to reduced liquidity near year-end and lower volatility levels.
Adam Chu from GreeksLive explained: “The closing period at year-end tends to be extremely illiquid,” emphasizing how limited trading activity makes it challenging for short-term upward momentum to gain traction during this time frame.
This content does not constitute financial advice.