Bitcoin Logs Longest Losing Streak Since 2024 as Fed Repricing Fuels Cautious Rebound

Bitcoin is facing its longest weekly slump since mid-2024, setting the stage for its worst quarterly performance since 2018. As the world’s largest cryptocurrency struggles, a cautious rebound is taking shape, with some experts warning of a potential bull trap below $80,000.

Bitcoin’s price has declined 24.43% in the fourth quarter, marking a rough patch as it faces headwinds from both macroeconomic pressures and cryptocurrency market conditions. Despite a recent uptick, analysts remain skeptical, and the outlook for the rest of 2025 remains uncertain.

A Rough Ride Ahead for Bitcoin?

Bitcoin has notched its fourth consecutive weekly loss, the longest downtrend since June 2024. After trading as low as $82,100 on November 21, Bitcoin has bounced back slightly, currently trading around $87,400, marking a 6% gain from its previous low.

However, despite this rebound, Bitcoin’s performance for the final quarter of 2025 remains bleak, and many are bracing for further turbulence heading into the new year. Sean Dawson, head of research at options analytics platform Derive, described the current market environment as “a rough ride into Christmas,” warning that traders should prepare for continued volatility.

Spot Market Metrics Signal Potential Bottom

Despite the gloomy price action, one key on-chain metric points to an underlying demand that may help Bitcoin find a bottom. The aggregate spot bid-ask delta at 10% depth has surged to its second-highest level in 2025. This spike signals a rise in dip-buying activity, with buyers potentially absorbing selling pressure, which could pave the way for a recovery.

This type of price action has historically been a sign of bottom formation. In early 2025, a similar spike in the bid-ask delta followed a downtrend, helping to catalyze a 64% bull run. While a similar outcome is not guaranteed, the metric suggests that Bitcoin may have already hit its lowest point, or is close to doing so.

Federal Reserve’s Role in Bitcoin’s Recovery

Bitcoin’s recent uptick aligns with the Federal Reserve’s shifting stance on interest rates. The odds of a rate cut in December have jumped dramatically, from 40% last week to nearly 70% today. The repricing of Fed policy is fueling some optimism in the markets, but Dawson remains cautious.

“Pessimism has peaked, but I’d be cautious of walking into a bull trap,” Dawson stated, referring to the risk that Bitcoin’s recent recovery may be short-lived. He highlighted that many digital asset treasuries, including Bitcoin and Ethereum exchange-traded funds (ETFs), are trading below their net asset value, which could hinder accumulation and recovery.

Despite the potential for a rate cut, Dawson pointed out that persistent inflation concerns could slow the transition into quantitative easing. “Fears of sticky inflation” could dampen market sentiment, making it difficult for Bitcoin to sustain any meaningful upward momentum in the near term.

Options Market Sentiment and Bearish Outlook for 2025

As traders continue to hedge against downside risks, the options market is reflecting a bearish outlook for Bitcoin through the end of 2025. Dawson noted a significant buildup of put options in the $80,000 to $85,000 range for December 2025 expiry. Puts are options contracts that allow traders to bet on falling prices, and the current options flow indicates that many are bracing for further downside.

“I wouldn’t be surprised if Bitcoin briefly slipped into the mid to high $70,000 range before recovering to roughly $90,000 by the end of the year,” Dawson said, citing the importance of the Fed’s upcoming decisions in shaping the future of the markets.

Looking Ahead: Fed Decisions Could Set the Tone

While Bitcoin sentiment is currently in “extreme fear” territory, there are signs that the outlook could improve if the market sees a continued recovery. The Federal Reserve’s decision to end quantitative tightening on December 1, followed by an interest rate decision on December 10, will be pivotal in determining the tone for Bitcoin and broader financial markets in the weeks to come.

If the Fed strikes a dovish tone and signals further easing, Bitcoin could see more upside potential. However, any signs of continued hawkishness or concerns about inflation could weigh heavily on Bitcoin’s recovery prospects.

Conclusion: A Wait-and-See Approach for Bitcoin Investors

Bitcoin’s current losing streak, coupled with ongoing macroeconomic pressures, paints a picture of uncertainty heading into the final months of 2025. While there are signs of potential recovery, including increased demand from dip-buyers, the risk of a bull trap below $80,000 is real. Investors will be closely watching the Fed’s upcoming decisions, which will likely have a major influence on Bitcoin’s trajectory as it heads into 2026.