As 2025 draws to a close, the Bitcoin market is once again attracting attention as an exception to the traditionally strong trend. Traditionally, December, under the banner of the "Christmas rally," sees risk assets like US stocks tend to rise. However, this year, Bitcoin has defied expectations, failing to show a significant upward trend and exhibiting a pattern of cyclical repetition coupled with the influence of macroeconomic factors. According to a report released by Kaiko Research, while Bitcoin has performed strongly in past boom-bust cycles, this time it has shown weakness compared to traditional assets. Particularly during the recovery phase following the October crash, US stocks rebounded successfully, but Bitcoin has yet to recover to corresponding levels.
Bitcoin's December performance has seen surges of over 30% in years with strong momentum, but conversely, it has also recorded drops of over 15% in weaker periods. This suggests that the end of the year is less about providing new direction and more about perpetuating existing trends. In fact, while the fourth quarter is historically the strongest quarter for Bitcoin, December's performance, viewed in isolation, shows irregularities each year. This demonstrates that Bitcoin continues to exhibit cyclical price behavior even at the end of the year.
Volatility metrics explain the disappointing performance of this year's Christmas rally. After the sharp price fluctuations in early December, Bitcoin's realized volatility surged to over 60%, while implied volatility declined, resulting in a negative spread of approximately 6 percentage points. This structure suggests that the market is more focused on stability than short-term direction. A similar volatility structure appeared in March of this year, which was followed by volatility compression and a subsequent decline.
Spot trading and derivatives market positions also support this interpretation. Spot trading volume for BTC and ETH shrank to $200-300 million, a significant decrease from over $400 million at the beginning of the year. In the derivatives market, BTC open interest remained between $7 billion and $9 billion throughout December, avoiding deleveraging but also showing no significant expansion. Conversely, Altcoin open interest increased slightly, indicating only some selective speculative demand.
No clear directional positions were detected in the options market. Based on the December 26th expiry date, call/put option trading was concentrated at near-month strike prices, with the highest concentration at the $85,000 level, but this was interpreted as hedging demand rather than aggressive buying. Furthermore, the December 26th options market, with a trading volume of approximately $600 billion, was the most active, but the call-put ratio was relatively balanced rather than one-sidedly bullish. This signals that the market is more focused on managing existing positions than on new directions. In conclusion, Bitcoin did not exhibit the strong seasonal rally seen in traditional assets at the end of this year, but rather highlighted a development trend dominated by cyclical factors, macroeconomic factors, and risk management.
