Stock Market's 2025 Outperformance Continues as Bitcoin Retreats to $86,000

The cryptocurrency market faced headwinds this week as Bitcoin struggled with momentum following softer-than-forecast inflation data. During Thursday’s U.S. trading session, BTC initially climbed toward the $89,000 level before settling back around $86,000 as selling pressure mounted.

Meanwhile, equities extended their rally, further widening the performance gap between traditional markets and digital assets in 2025. This divergence raises important questions about market dynamics and investor sentiment heading into the new year.

Market Context: Why the Divergence?

The CPI data release served as a catalyst, yet produced divergent reactions across asset classes. While the softer inflation reading typically supports both stocks and crypto, equity markets capitalized more effectively on the development. Bitcoin’s inability to sustain its $89,000 bounce highlights growing challenges in maintaining upside momentum.

The $86,000 level emerged as a key support point, reflecting the intense tug-of-war between bullish and bearish traders. This consolidation pattern mirrors broader market conditions where risk assets compete for investor capital.

Looking Ahead

The stock market’s continued outperformance in 2025 suggests that institutional capital may be favoring traditional equities over cryptocurrencies. Bitcoin’s pullback to $86,000, while not catastrophic, signals that the path to new all-time highs requires stronger catalysts and improved market sentiment. Traders watching this space should monitor whether $86,000 holds as support or signals further consolidation ahead.