Bitcoin nudged lower Tuesday as tax‑loss selling and thin liquidity pushed crypto stocks into steeper losses, analysts say. Quick take - Bitcoin slipped about 1% over the past 24 hours to just under $88,000. - Precious metals peppered headlines — gold, silver and copper all hit record highs earlier in the session before pulling back slightly. - U.S. equities were modestly higher (the Nasdaq gained roughly 0.45%), but crypto-related equities fell much harder. Crypto equities hit hardest Digital asset treasury plays and other crypto-focused stocks led the declines. Notable moves: - MicroStrategy (MSTR) -4.2% - 21Shares/XXI (XXI) -7.8% - ETHZilla (ETHZ) -16% - Upexi -9% - Gemini (GEMI), Circle (CRCL) and Bullish (BLSH) all down roughly 6% Why this is happening Analysts at QCP Capital pointed to year‑end tax‑loss harvesting as a key driver of short‑term selling, especially in thin market conditions. Tax‑loss harvesting is when investors sell losing positions to lock in losses and lower their tax bills — a common year‑end maneuver that can amplify price moves in less liquid assets. Paul Howard, senior director at trading firm Wincent, added that portfolio managers often trim risk ahead of holidays and year‑end reporting, sometimes preferring not to show cryptocurrency holdings on balance sheets. Leverage and liquidity concerns QCP also flagged a fall in open interest on perpetual futures — roughly $3 billion pulled from BTC perpetuals and about $2 billion from ETH — which has reduced leverage and left markets more exposed to large swings. The firm noted that Friday’s record Boxing Day options expiry was unusually large (representing over 50% of Deribit’s total open interest), increasing short‑term vulnerability even as some downside positioning eased. At the same time, persistent $100,000 BTC calls suggest there’s still tentative optimism for a year‑end “Santa rally.” Outlook QCP expects much of the holiday‑driven volatility to mean‑revert as liquidity returns in January. Wincent’s Howard sees a period of consolidation ahead and doesn’t expect a quick return to October’s highs — it could take many months for the market to recover from a roughly $2.6 trillion current market cap back toward a $4 trillion peak. Macro backdrop and Fed commentary The broader macro picture remains mixed. The Bureau of Labor Statistics reported inflation‑adjusted GDP grew at a 4.3% annualized pace in Q3, signaling a still‑hot economy. On Tuesday, former President Donald Trump posted on Truth Social that his preferred next Federal Reserve chair should lower rates when markets are doing well, criticizing current policy for weighing on markets even amid good economic news. His comments were added to the story as an update on Dec. 23, 2025. Bottom line Holiday tax flows and thinner liquidity — not a fundamental collapse in demand — appear to be driving near‑term crypto weakness. Traders should watch derivatives open interest, big options expiries and January liquidity as potential catalysts for a reversal or further volatility. Read more AI-generated news on: undefined/news

#BTC #ETH