Opinion: Fed policy repricing fuels cautious rebound; Bitcoin experiences its longest losing streak since 2024.
TL;DR
Bitcoin is recovering from its longest losing streak since 2024, with a cautious rebound fueled by Fed rate cut expectations. Despite a 24% Q4 drop, strong spot market demand suggests potential bottom formation, but experts warn of a possible bull trap.
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According to Odaily Odaily, Bitcoin has recorded a weekly loss for the fourth consecutive week, its longest losing streak since June 2024, although it has recently begun to recover some of last week's losses.
According to Decrypt, Bitcoin's price action is pushing its fourth-quarter performance to potentially be its worst since 2018, with a current drop of 24.43%.
Sean Dawson, head of research at options analytics platform Derive, said he expects a tough period for the market before Christmas and is cautious about the current rally, believing it could be a bull trap. He pointed out that most digital asset treasuries (DATs) are trading below their net asset value, hindering their accumulation ability, and that spot Bitcoin and ETH ETFs have also fallen.
However, a key spot market indicator reveals underlying demand: the 10% depth aggregated spot bid-ask spread has surged to its second-highest level since 2025, suggesting increased bargain hunting activity that may be absorbing selling pressure. This indicator last spiked after sustained declines in March and April, helping to form the bottom that catalyzed the 64% bull market.
Bitcoin is currently trading at $87,400, up about 6% from its November 21 low of $82,100, and up about 1.8% in the past 24 hours. This rebound coincides with a sharp repricing of Federal Reserve policy, with the market's probability of a December rate cut jumping from 40% last week to nearly 70%.
Dawson is optimistic about Bitcoin rebounding to $100,000 in the first quarter of 2026, but pessimistic about the remainder of 2025. He cites negative biases in the options market, noting that traders are hedging against downside risk, particularly with a significant accumulation of put options expiring in the $80,000 to $85,000 range for options expiring in December 2025. He suggests that if the Federal Reserve doesn't adopt a hawkish stance, Bitcoin could briefly dip into the mid-to-high $70,000 range before recovering to around $90,000 by the end of the year.