Bitcoin’s 2025 Endgame: Trading the $83K–$95K Box as the Fed Sets Up a Possible 2026 Push Toward $135K

Bitcoin’s December stumble has reset expectations. After a roughly 7% decline this month and a drawdown of about 31% from the October 6 all-time high of $126,080 (CoinGecko), traders have shifted from momentum-chasing to damage control. Gold’s bid during the equity and crypto pullback underscored a broad risk-off rotation, and negative headlines have been hitting harder than positive ones.

Here’s the core tension: policy has improved at the margin, but the liquidity impulse hasn’t arrived yet. The Federal Reserve ended quantitative tightening on Monday, removing a structural headwind. That is constructive, but effects from QT’s end tend to appear with a lag. In 2019, risk assets often needed six to 12 months after QT concluded before a durable advance took hold. If that cadence repeats, Bitcoin’s cleaner trend may belong to 2026, not the final weeks of 2025.

Near term, market microstructure is dictating price. Derek Lim, head of research at Caladan, expects Bitcoin to consolidate with elevated volatility between $83,000 and $95,000. That “box” reflects rebalancing flows, uneven liquidity, and a skittish tape. Sellers lean into strength near the top of the range; value-sensitive bids show up closer to the low-to-mid $80Ks. It’s classic post-spike digestion: funding normalizes, leverage resets, and participants hesitate to chase without a macro green light.

The December 1 drop illustrated the fragility. With little fresh macro data, uncertainty around MicroStrategy and renewed speculation about Tether’s solvency amplified downside pressure. In thin conditions, bad news travels faster than good. This asymmetry tends to persist until liquidity widens and the policy path feels clearer.

Crucially, analysts aren’t calling this a new bear market. Tim Sun, senior researcher at HashKey Group, frames it as a bull-market correction: weak risk appetite and tight liquidity, without the hallmarks of a full unwind. A true bear phase often features long-term capital leaving, narrative collapse, and a visible institutional retreat. Instead, euphoria is scarce and positioning is cautious—conditions that can support a bottom-building process rather than a protracted downtrend. Still, if $75,000 breaks with conviction, Lim warns the thesis would be invalidated and a deeper leg could follow.

What unlocks the next leg? Fed communication—more than a single cut—is the fulcrum. Sun argues a December rate cut matters less than the trajectory signaled for 2026. Lim’s mid-to-long-term framework targets a band between $110,000 and $135,000, contingent on several drivers aligning: - Two to three additional rate cuts through mid-2026 - Balance sheet stability now that QT has ended - Ongoing institutional participation

Think of this as a liquidity relay. Ending QT hands the baton to forward guidance; guidance sets discount rates; lower rates and balance sheet stability invite risk tolerance back into global portfolios. Bitcoin, which trades increasingly like a high-beta macro asset in these phases, tends to benefit once those pieces line up and transmission reaches crypto rails.

The psychology is straightforward. After a 2025 run that culminated in the $126,080 high, participants got conditioned to sell rips and wait for confirmation. Without a perceived policy tailwind, upside attempts face quick supply. Conversely, the absence of speculative excess and the presence of clear invalidation levels (~$75,000) keep fresh capitulation at bay. That push-pull creates the $83,000–$95,000 coil.

For practitioners, the signposts are familiar: - Fed dots and forward guidance for 2026 - Evidence that post-QT liquidity is translating into broader risk bid - Quality of dips near $83,000 and supply response around $95,000 - Resolution of headline risks that periodically tighten crypto liquidity

Patience usually pays in these tapes. If the Fed’s 2026 script tilts looser and QT’s end bleeds into real flows, Bitcoin’s path to the $110,000–$135,000 region becomes plausible. Until then, expect range tactics and sharp volatility inside the box, not a one-way trend into year-end.