Key takeaway
The Crypto market remains in correction mode, and momentum trades continue to fail. Traders should focus on risk management and key levels, rather than chasing short-term moves. Patience is essential until clearer signs of stabilization or trend reversal appear.
Macro outlook
The Bank of Japan raised rates to 0.75% on December 19, its highest in nearly 30 years. This move strengthened the Yen and triggered risk-off flows across assets, including crypto. Additionally, the Federal Reserve’s hawkish guidance reduced expectations of rate cuts in 2026, tightening global liquidity for high-risk assets.
Despite increased volatility, crypto markets showed modest resilience as the week closed.Crypto reacted with increased volatility but showed resilience in late trading. Bitcoin dipped below $86,000 intraday before recovering, while Ethereum faced heavier selling pressure reflecting broad caution.
While Bitcoin slid under $89,000, Gold ($4,330) and Silver ($66) hit fresh record highs, signaling that capital is currently rotating into hard assets over digital ones during this period of uncertainty.
Bitcoin (BTC)
Bitcoin traded within a $85,000–$90,000 range throughout the week, failing to reclaim higher resistance levels.
- BTC remains roughly 30% below its October all-time high of $126,000
- Sellers continue to dominate above $90,000, confirming this level as key resistance.
BTC/USD
Key Bitcoin levels to watch
- Support: $85,000–$86,000
- Downside risk: A breakdown could open a move toward $80,000
- Bullish signal: A sustained reclaim and weekly close above $90,000
Until resistance is reclaimed, BTC remains range-bound with downside risk.
Ethereum (ETH)
Ethereum extended its relative weakness, falling toward $2,900 and remaining below key psychological resistance.
ETH/USD
- The ETH/BTC ratio weakened, signaling continued capital rotation into Bitcoin.
- Technical structure remains bearish below $3,000
Key Ethereum levels to watch
- Support: $2,500–$2,800
- Bullish trigger: A move above $3,200 with strong volume confirmation
Without a decisive breakout, ETH remains vulnerable to further downside.
Crypto market sentiment
The Crypto Fear & Greed Index ended the week in Extreme Fear, hovering between 16 and 21.
While this reflects heightened retail caution, historically, extreme fear conditions often emerge near market bottoms, particularly when selling pressure begins to stabilize.
Bottom line
The correction deepened this week due to global tightening and reduced risk appetite. Institutional ETF flows showed mixed signals, with some late inflows but overall outflows in recent months.
Watch Bitcoin's defense of $85,000 and Ethereum's hold above $2,800. A weekly close above $90,000 for BTC would shift the bias bullish. Until then, traders should prioritize capital preservation, disciplined entries, and tight risk controls.
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