Crypto Market

BTC and ETH Market Insight

The crypto market spent the past week in a cautious consolidation phase, still digesting the sharp correction. Thin holiday liquidity, heightened risk aversion, and no major bullish catalysts combined to hold back any real push for a classic Santa rally as the year winds down

Bitcoin (BTC) traded within a fairly tight range, hitting a low around $84,500 early in the week amid broader risk-off flows over the BoJ’s 25 bps rate hike on Dec 19 which forced a wave of yen carry trade unwind and deleveraging in overleveraged perps positions. However, strong institutional backing from Strategy (MSTR) helped cap the downside; announcing another over 10,000 BTC accumulation, constraining the dip and forming a gradual recovery toward the psychological level of 90,000 by week’s end.

Broader sector rotation toward safer assets added to the weakness in speculative altcoins and non-BTC plays. Ethereum and most alts tracked Bitcoin's moves pretty closely, facing ongoing selling pressure while hovering around key psychological levels as traders hunted for relative alpha ahead of Christmas.

Technical indicators reflected a bearish-to-neutral overall, with the 14-day RSI settling in a balanced 40–59 range amid last week's early sell-off offering room for upside without overbought risks. Other factors like Fear and Greed Index and MACD are signaling hints that some positive momentum might be building up under the surface amid choppy price action. Overall, last week's risk averse tone seems to be setting up the market for a possible final Santa rally before year-end, with no further big bearish news looking ahead after the release of the US Third Quarter GDP Report on 23 Dec. Those broad psychological price levels in BTC, ETH and other altcoins are believed to be a constructive setup as a critical support and foundation for the early 2026.

Upcoming Macro Calendar - Source: Trading Economics

Options Market

The week opened cautiously in crypto markets, with BTC and ETH testing key support levels before a modest rebound left both assets essentially flat. Implied volatility remained compressed despite realized volatility spiked following options expiry. Put skew retained a downside bias but eased as calls gained traction. BTC and ETH ETFs recorded outflows of $158.2 million and $75.8 million, respectively, amid seven consecutive days of ETH redemptions driven by BlackRock’s ETHA. Despite these ETF pressures, underlying fundamentals sustained range-bound momentum, though thin liquidity limited potential breakouts. Consider short-term strangles to exploit post-expiry volatility compression or bullish call spreads to capitalize on further skew softening.

Altcoins and Blockchain News

Macro

The major indexes finished the week mixed: the DJIA shed 0.7%, the S&P 500 added 0.1%, and the Nasdaq rose 0.5%. The Chinese stock market also finished a mixed week by the end of the year: the Shanghai Composite Index added 0.03%, the CSI 300 shed 0.28% and the Hang Seng index lost 1.10%.