Bitcoin on Christmas Eve: Crash below $90,000 and end of hope for a holiday rally

Bitcoin did not fulfill the promises of the “holiday rally.” On December 24, the BTC/USD rate dropped nearly 30% from October’s highs, marking the worst quarterly performance since Q2 2022 – a period shaken by the collapses of TerraUSD and Three Arrows Capital.

Wednesday’s session proved to be particularly dramatic. At $87,600 USD, a shocking incident occurred on one of the leading trading platforms – the BTC/USD1 (stablecoin trading pair linked to a specific entity) experienced a flash crash from $87,600 USD to $24,100 USD within seconds – a decline exceeding 70%. Moments later, the price rebounded to $87,000 USD. The anomaly affected only USD1 and was not repeated on major pairs.

Currently, Bitcoin hovers around $90,310 USD, remaining in the range of $85,000–$90,000 USD, with an annual decline exceeding 4.5%.

Shallow order book depth – cause of the flash crash

Analysts point to insufficient liquidity in new stablecoin pairs. An inadequate number of market makers creates a shallow order book – each larger sell order or forced liquidation can temporarily breach the buy side.

Short-term price anomalies may also result from widening spreads, erroneous quotes, or trading algorithms reacting to unusual movements. During periods of low trading activity, the effect is amplified – fewer market participants are available to absorb order flows and restore balance.

The situation highlights the risks of speculation on low-liquidity pairs, especially amid geopolitical uncertainty. Although many spot positions remained practically unaffected by the flash crash, the warning for traders using leverage is clear.

Gold does what Bitcoin should do

Meanwhile, traditional markets send quite different signals. The S&P 500 reached a record high of 6921.42 points, and tech stocks again delivered gains to investors holding positions.

Even more impressive is gold’s performance. The spot gold price reached historic highs of $4525.18 per ounce, with a yearly increase exceeding 70% – the best year since 1979. Bitcoin, on the other hand, remains positioned downward – its “digital gold” has not attracted the defensive capital flows that drive the gold price higher.

This divergence is symptomatic. While traditional safe-haven assets attract capital as long-term hedging tools, cryptocurrencies remain marginalized in large investors’ portfolios. Historically, Bitcoin has shown variable performance during holidays – from a 33% increase in 2011 and 46% in 2016, to declines of 14% in 2014 and 10% in 2021. The average holiday growth since 2011 has been only 7.9%.

Drop below key support and options freeze

Bitcoin broke below the 365-day moving average at around $102,000 USD, which in this cycle has served as a key support level. The lack of a decisive return above this level opens the door to a deeper correction.

On December 26, options worth over $23 billion USD expired – an amount that froze directional bets and reinforced the market deadlock. Holiday liquidity weakness further limited activity, but the deeper problem remains unchanged: the absence of clear buyers willing to engage.

Long-term BTC holders also bear the burden. Early positions are systematically taking profits – a trend especially visible during the October downturn. This early holder selling prevents sharp rebounds from gaining momentum. Some analysts suggest that selling pressure may soon exhaust itself, leaving Bitcoin in a consolidation phase capable of laying the groundwork for gains in 2026.

ETF outflows are increasing

As traders enter the holiday period, outflows from funds are rising. On December 24, spot Bitcoin funds recorded a net outflow of $175 million USD, and Ethereum funds saw a $57 million USD outflow.

The largest outflows came from major asset managers – leading ETFs experienced outflows of tens of millions of dollars daily. For Ethereum, outflows were even more significant – up to $5.083 billion USD historically. This pattern is typical: during major holidays, trading volume drops sharply, market makers reduce exposure, and investment strategies shift to a defensive mode.

For tax reasons, traders in some regions realize profits from cryptocurrencies before year-end. The increased risk and lack of enthusiasm suggest that significant moves are expected only in the new year, not during the current holiday period.

Bitcoin – an asset built on excitement – sends its own signal: by the end of 2025, it lacks enthusiasm.