BITCOIN FACES LONGEST SLIDE SINCE 2024; INVESTORS EYE FED-DRIVEN REBOUND

Bitcoin is experiencing its longest weekly slump in over a year, putting the cryptocurrency on course for its worst quarterly performance since 2018, with analysts warning of a potential bull trap.

Bitcoin has recorded its fourth consecutive weekly loss, marking the cryptocurrency’s longest downtrend since June 2024, even as it begins recovering some of last week’s declines.

The world’s largest digital asset is on track for its worst fourth-quarter performance since 2018, currently down 24.43% for the period.

“I expect a rough ride into Christmas,” said Sean Dawson, head of research at options analytics platform Derive, highlighting ongoing market caution amid persistent volatility.

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The aggregate spot bid-ask delta at 10% depth has surged to the second-highest level of 2025, signaling increased dip-buying activity and the potential absorption of selling pressure.

Historically, a similar spike following a prolonged downtrend in March and April helped establish a market bottom, which later fueled a 64% bull run.

Bitcoin is currently trading around $87,400, up approximately 6% from the November 21 low of $82,100, and showing a 1.8% gain over the past 24 hours, according to CoinGecko data.

The recent Bitcoin recovery coincides with a sharp repricing of Federal Reserve policy, as the probability of a December rate cut has surged from 40% last week to nearly 70% today.

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Despite the uptick, Sean Dawson remains cautious. “Pessimism has peaked, but I’d be wary of walking into a bull trap,” he said, highlighting potential risks in the current rebound.

Dawson also noted ongoing market pressures, pointing out that most digital asset treasuries are trading below their net asset value, limiting their ability to accumulate. Similar trends are visible in spot Bitcoin and Ethereum ETFs, which continue to trade in the red.

Even with higher rate-cut expectations, fears of persistent inflation could result in a slower transition into quantitative easing than anticipated, adding further uncertainty for traders, the analyst explained.

What’s Next for Bitcoin?

While Sean Dawson remains optimistic about a potential recovery to $100,000 by the first quarter of 2026, he is cautious for the remainder of 2025.

Dawson points to a negative skew in the options market, noting that traders are heavily buying puts to protect against downside risk. In particular, the December 2025 expiry shows a large build-up of puts in the $80,000 to $85,000 range, signaling continued concern over price drops.

“I wouldn’t be surprised if Bitcoin briefly dips into the mid- to high-$70,000 range before climbing back to around $90,000 by year-end, provided the Fed avoids a hawkish stance,” Dawson said.

Although overall market sentiment remains in “extreme fear” territory, the outlook has slightly improved following the weekend bounce, offering a cautious glimmer of hope for investors.