Today is December 23rd, and Bitcoin prices are hovering around $88,000, despite a brief rebound to over $90,000 yesterday. However, this surge seems more like a 'bull trap', aimed at attracting retail investors to chase higher prices, accumulating liquidity for a subsequent larger downturn.
Some analysts in the market also indicate that Bitcoin's structure is bullish in the short term, mainly due to thin downward liquidity and solid support levels, making it difficult for market makers to push for a significant drop immediately. This has led to a temporary price rebound. However, the medium to long-term outlook remains pessimistic, with Bitcoin expected to further dip into the $64,000-$70,000 range, possibly reaching it in the first or second quarter of 2026. This level is viewed as an initial major target rather than the final bottom.
The $68,000-$74,000 range has been widely anticipated, unable to create 'maximum pain', thus the downward target has been adjusted to reshape market structure. Recent price dynamics corroborate this view: Bitcoin quickly surged from $87,000 to $90,000, then plummeted back within hours, triggering massive liquidations. Many chasing traders were caught, and this bidirectional false volatility is expected to continue until liquidity is sufficiently accumulated, leading to a more severe decline.
Market sentiment remains weak, with the cryptocurrency fear and greed index maintaining in the extreme fear zone (around 20-25 points). The market is closely watching the largest options expiration event in Deribit exchange's history on December 26th, involving about $27-28.5 billion notional value of Bitcoin and Ethereum contracts, with Bitcoin options around $23.6 billion. This expiration date coincides with the holiday week, where trading volume is low and liquidity is thin, amplifying the impact of each large order. The maximum pain point for options is near $96,000, with a put/call ratio of about 0.38, indicating an overall bullish position. However, market makers' hedging actions may keep prices relatively stable before expiration, with a significant breakout and increased volatility expected afterward.
The macro environment is also unfavorable for risk assets. The Bank of Japan's interest rate hikes are tightening global liquidity, leading investors to turn to safe-haven assets. Gold prices hit a record high, reaching about $4,480-$4,490 per ounce, with an increase of over 70% this year, far surpassing Bitcoin's performance (which has slightly decreased by about 5-6% this year). Many analysts point out that gold may correct after being overbought, with some funds possibly flowing back into Bitcoin, but currently, Bitcoin is clearly lagging behind gold.
MicroStrategy (now known as Strategy) as the largest corporate Bitcoin holder did not announce new purchases this week, maintaining its Bitcoin reserves at 671,268 BTC (worth approximately $60 billion). The company increased its dollar reserves to about $2.19 billion through stock issuance, and founder Michael Saylor hinted that this helps manage short-term volatility while adhering to a long-term Bitcoin strategy.
Overall, Bitcoin may continue to consolidate in the short term, with downside risks limited at recent lows. However, after the options expiration, as hedging pressures are released and holiday liquidity further declines, the market may face greater volatility. Caution is advised, with attention to the $96,000 pain point and signals for a break below the $88,000 support level. In the medium to long term, structural downside risks remain, and it is recommended to wait for clearer catalysts before taking action.
