'On a knife's edge': Analysts say bitcoin faces rising downside bets amid year-end uncertainty and mixed macro data

Crypto markets sat "on a knife’s edge" as traders positioned for heightened downside risks into the end of 2025, with a growing concentration of Bitcoin put options at the $85,000 strike signaling fears of a break lower.

According to Bitcoin continues to stall, trading near $87,000 after another failed attempt to reclaim $90,000 this week. The lack of follow-through has sharpened focus on structural weakness heading into the December 26 options expiry, Nick Forster, founder of onchain options platform Derive.xyz, noted in a Thursday update shared with The Block.

Forster said traders have shifted aggressively toward protective structures. He noted that 30-day BTC volatility has climbed toward 45% while skew holds near minus 5%, with longer-dated skew anchored at the same level through Q1 and Q2 of next year.

Positioning for the upcoming expiry has become polarized. Calls have built at the $100,000 and $120,000 strikes, suggesting some traders are still holding out for a sharp relief rally.

However, the dominant flow suggests market jitters, with bears accumulating "substantial put exposure" at the $85,000 strike in anticipation of BTC sliding beneath that threshold in the near term, Forster stated. He added that option-implied probabilities continue to reflect a challenging environment. Markets assign a 30% chance that BTC reaches $100,000 and only about a 10% probability of reclaiming all-time highs.

ETH positioning shows more balance, but hedging still builds

Forster said Ethereum’s skew shows a more nuanced outlook. Short-dated skew sits near minus 4%, signaling near-term caution, while the 180-day skew is closer to minus 1%, indicating a far more balanced expectation into Q2 2026 compared with BTC’s persistent bearish bias.

ETH call positioning is relatively flat across the $3,000, $4,000, and $5,000 strikes, though some exposure reflects older bullish structures rather than fresh conviction. On the flip side, puts have concentrated around $2,500 for the December 26 expiry, marking the key level that traders are actively hedging.

Option-implied probabilities suggest ETH has a 45% chance of reclaiming $3,000 by the end of Q1 and a 25% chance of surpassing $4,000 over the same period. "Markets continue to slide as we head into the New Year, with prices sitting on a knife’s edge amid mixed U.S. economic data and persistent macro uncertainty," said Forster.

Fragile macro holding pattern

The setup unfolds on one of the heaviest macro days of the month, with U.S. CPI due today after a week marked by rate-path repricing and renewed uncertainty over global policy direction.

Timothy Misir, head of research at BRN, said Bitcoin remains caught below key structural levels, with rejections above $90,000 reinforcing a lack of conviction.

He pointed to a pattern of short-lived rallies and shallow but persistent dips as evidence of distribution rather than accumulation. Ethereum’s drop to $2,800 and broader softness across majors added to the sense of stalled momentum, the analyst opined.

Misir said CPI represents the next decisive catalyst for risk assets. An inflation data surprise or a more aggressive policy move by the Bank of Japan could pressure global liquidity and push BTC beneath its key moving averages. Alternatively, a more benign print, paired with continued ETF inflows, could offer another attempt to reclaim $90,000, though recent price action has shown limited momentum. Dense overhead resistance above $92,000 continues to cap recovery attempts.

Meanwhile, the True Market Mean near $81,300 remains a psychological anchor for bears, echoing equilibrium conditions from early 2022 where time, rather than price, became the dominant source of stress, according to BRN’s expert.

Despite the defensive tone, flows have not collapsed. U.S. spot Bitcoin ETFs recorded $457 million in net inflows on Dec. 17, led by Fidelity’s FBTC with $391 million, according to The Block’s data. Ethereum ETFs saw $22.4 million in net outflows, while Solana and XRP products recorded modest inflows.

Even so, BTC remains well below the levels at which prior buyers are positioned, reinforcing Misir’s note that structural resistance continues to dominate the tape and mute reactions to positive flows.

"Patience remains the trade," Misir wrote. "Crypto markets remain trapped in a fragile holding pattern. Bitcoin’s inability to reclaim key structural levels keeps the risk balance skewed toward further consolidation or downside. While ETF inflows and long-term supply trends offer support beneath the surface, macro catalysts and overhead supply continue to dominate price action."