Bitcoin (BTC-USD) headed for a third straight month of losses on Wednesday, capping a year defined by record highs and a dramatic crash.
On the last trading day of the year, the token hovered near $88,000, after weeks of trading in a tight range.
Still, a bounce could be in the cards as early as next month.
Earlier this week, crypto research firm 10X Research suggested technical indicators show bitcoin’s “downtrend remains in place but likely flipping to bullish in January.”
Read more about today’s market action.
The world’s largest cryptocurrency is down roughly 5% year to date, with forced leveraged liquidations and long-term holder selling driving prices about 30% below their October highs above $126,000, pulling the broader crypto market lower.
December would mark a rare instance of bitcoin closing lower for three consecutive months, an event that has occurred just 15 times in history. Fundstrat strategist Sean Farrell this week said portfolio rebalancing in the next month could create a bounce in prices.
“We should see some rebalancing flows come into these ETFs and perhaps ignite a bit of a spark among the bulls,” Farrell said.
The strategist’s base case remains defensive for the first half of next year, with the risk of a drawdown which could create an attractive entry point rally in the second half of 2026.
Read more: What is bitcoin, and how does it work?
The crypto industry entered the year with several tailwinds, including the appointment of a crypto-friendly SEC chair, the creation of a crypto and AI czar role, initiatives tied to a strategic bitcoin reserve, and landmark stablecoin legislation.
The drawdown over the past three months has tempered strategists’ expectations for next year, as some expect institutional demand to be more selective rather than driving a sharp breakout.
“In my view, bitcoin’s outlook for Q1 2026 leans more toward a scenario of stability and renewed accumulation rather than a strong growth phase at the beginning of the year,” XS.com senior market analyst Linh Tran said.
“Price fluctuations may remain within a range of approximately $80,000 to $100,000,” Tran added.
Nic Puckrin, investment analyst and co-founder of the Coin Bureau, sees the “debasement trade” as an ongoing theme in 2026, with precious metals benefiting the most.
“Bitcoin will likely also benefit, but wild price predictions are unlikely to materialize,” he said. “While we may well see a return to a new all-time high, this won’t be materially higher than the previous level of $126,000, after which a bear market is on the cards.”