As the year draws to a close, Bitcoin is exhibiting notable weakness. Despite a record-breaking year fueled by significant institutional interest, the leading cryptocurrency has slipped below crucial technical thresholds. Market participants are now debating whether this represents a healthy consolidation phase or signals a more pronounced shift toward seller control in the near term.

Institutional Conviction Contrasts with Price Action

Amidst the price volatility, institutional appetite for Bitcoin remains a standout feature. This is most evident in the actions of MicroStrategy, the largest publicly traded corporate holder of BTC.

The firm disclosed fresh purchases of 1,229 Bitcoin between December 22 and 28. The acquisition required an investment of approximately $108.8 million, resulting in an average purchase price of about $88,527 per coin. This brings MicroStrategy’s total holdings to 672,497 Bitcoin.

These continued year-end buys highlight a clear divergence between short-term price softness and the long-term conviction of major market players. Many analysts interpret this activity as a sign that substantial demand exists at lower price levels, potentially building a fundamental support base for the medium term.

Technical Picture Shows Defensive Posture

Currently trading near $87,200, Bitcoin has fallen noticeably below the psychologically significant $90,000 level. The asset shows a weekly decline of nearly 1.5% and has retreated roughly 4% over the past 30 days.

From a chart perspective, the setup appears vulnerable:
* The current price sits approximately 30% below its 52-week high.
* It is trading about 3.6% under its 50-day moving average, which stands near $90,400.
* A Relative Strength Index (RSI) reading around 38 indicates a weak market condition, though it has not yet entered clearly oversold territory.

This positions Bitcoin in a defensive stance. Immediate support zones just above the recent annual low are now in focus. A break below this area would darken the consolidation outlook, while a swift recovery above the $90,000 region would signal renewed strength.

Should investors sell immediately? Or is it worth buying Bitcoin?

Sentiment Shifts as On-Chain Data Presents Mixed Signals

The price consolidation has coincided with a marked deterioration in overall market sentiment. The widely followed Crypto Fear & Greed Index has dropped to a reading of 23, signaling “Extreme Fear.” This shift is largely driven by disappointment that Bitcoin failed to achieve new highs in the final stretch of the year.

Concurrently, on-chain metrics offer a nuanced view:

• Exchange Flows: Short-term investors are taking profits from the Q4 rally, moving portions of their holdings back onto trading platforms.
• Network Health: Underlying network activity remains stable, with transaction fees returning to more normalized levels after the congestion seen in early December.
• DeFi Impact: The weaker BTC price is also weighing on the decentralized finance sector. Bitcoin-denominated yield products are seeing a slight decrease in Total Value Locked (TVL) as capital rotates toward stablecoins.

Collectively, this paints a picture of a market phase where near-term caution prevails, without any evident damage to the fundamental network dynamics.

Macro Backdrop and the Path into 2026

This period of weakness unfolds against a backdrop of broader repositioning across financial markets. Investors are adjusting their portfolios in anticipation of potential interest rate changes by the U.S. Federal Reserve in early 2026. The result is a temporary rotation away from risk assets, a trend affecting both equities and cryptocurrencies.

The broader digital asset market continues to track Bitcoin’s movement. Ethereum has fallen below the $3,000 mark, and the total market capitalization for crypto assets now stands at approximately $3.04 trillion.

For Bitcoin, the technical level around $87,000 remains critical for the weekly close. Holding above this zone into the year’s end would help preserve the overarching bullish structure heading into the new year. A weekly finish below it, however, would increase the likelihood of a weaker start to 2026.

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