🔥ALERT :Crypto markets are experiencing declines as profit-taking and low liquidity pressure prices, suggesting further challenges ahead.

Crypto markets edged lower over the weekend as year-end positioning, thinning liquidity, and cautious risk sentiment continued to weigh on prices, with major altcoins underperforming Bitcoin.Key TakeawaysBitcoin hovered near $89,600 as investors locked in profits ahead of year-end.Ether, Solana, Cardano and other major altcoins posted losses of up to 2%.Thin trading volumes and fragile risk appetite are amplifying price moves.Market participants expect continued pressure into early 2026 before sentiment resets.Crypto Markets Extend Pullback Into Final Trading WeekCrypto prices declined on Sunday as a broader pullback in global risk assets carried into the final full trading week of the year. Investors remain cautious amid concerns over stretched technology valuations, fading momentum in U.S. equities, and mixed signals from the Federal Reserve.Bitcoin slipped about 0.5% to trade near $89,600, hovering just above last week’s lows. Ether edged lower to around $3,120, while most major altcoins also traded in the red.XRP, Solana and Dogecoin each declined by up to 2%, reflecting a defensive tone across the market, according to aggregated market data.Tech Valuation Concerns Spill Over Into CryptoThe latest move comes as U.S. equity-index futures staged a modest rebound following last week’s tech-led selloff, which was driven by renewed scrutiny of artificial intelligence spending and concerns over earnings sustainability.While futures tied to the S&P 500 and Nasdaq 100 rose around 0.2% during Asian trading hours on Monday, investor confidence remains fragile. Many market participants are reassessing whether elevated technology valuations can be sustained into 2026.That uncertainty has spilled into crypto markets, which have struggled to regain momentum following October’s sharp drawdown.Thin Liquidity Amplifies Price MovesTrading volumes across major crypto assets have thinned noticeably in recent sessions, magnifying price swings and reinforcing a cautious tone.“Right now investors are hesitant to invest in cryptocurrencies given October’s dip, concerns of an overvalued U.S. stock market, and mixed signals from the Fed,” said Jeff Mei, chief operating officer at crypto exchange BTSE.However, Mei noted that underlying structural support remains intact. “Bitcoin ETF inflows are still net positive, and the Fed has started buying back securities in the market, adding liquidity that could eventually flow toward stocks and crypto,” he said.Year-End Positioning Drives Near-Term WeaknessMarket watchers widely attribute the current softness to year-end profit-taking and portfolio rebalancing.“Given it’s the end of the year, traders are likely taking profits now and will re-evaluate whether to initiate new crypto positions at the beginning of 2026,” Mei added.Others cautioned that reduced liquidity could exaggerate downside moves in the coming days.“This sell-off is a continuation of Friday’s negative bias,” said Augustine Fan, head of insights at SignalPlus. “As trading volumes have dropped significantly and sentiment has turned broadly negative, BTC and ETH are acting as hedging proxies as traders adjust exposures.”Fan warned against over-interpreting short-term volatility. “In thin conditions, day-to-day moves can be misleading, but overall sentiment remains weak, and the path of least resistance points to softer prices into year-end,” he said.Looking Ahead to 2026Despite near-term pressure, analysts note that U.S.-listed bitcoin ETFs and ongoing central-bank liquidity support could provide a more constructive backdrop once markets return to full participation in early 2026.For now, crypto markets appear stuck in a defensive, range-bound phase, with year-end profit-taking and low liquidity likely to remain dominant forces.