Bearish Market Insights for Bitcoin December 2025 Navigating the Current Landscape
- 2 days ago
- 4 min read
Bitcoin’s price action in late 2025 shows a clear bearish trend, marked by persistent downward pressure and momentum divergence. This post explores the current market regime for BTCUSD, analyzing key technical indicators, institutional liquidity patterns, and risk management strategies. By understanding these factors, traders and investors can better navigate the challenges and opportunities in Bitcoin’s evolving landscape.
Current Market Regime and Technical Overview
Bitcoin is firmly in a bearish regime as of December 19, 2025. Multiple technical signals confirm this outlook:
Bear Strength Confirmed at 75%: The majority of price action supports a downward bias.
Moving Averages Aligned Bearish (~82%): The 20, 50, and 200-day moving averages all slope downward, with price trading below these key levels.
Directional Movement Index (DMI) Strong Bearish (~84%): The -DI dominates the +DI, signaling strong selling pressure.
Ichimoku Cloud Bearish Positioning (~80%): Price remains below the cloud, indicating resistance overhead.
Descending Channel Rejection at $94,000–$96,000: Attempts to break higher have failed near this range, reinforcing resistance.
Despite this, there is a minor offset from bullish signals such as a MACD bullish crossover near $88,237 and approximately 25% bull strength. These suggest potential short-term bounces but do not negate the overall bearish trend.
Key Resistance and Entry Points
For traders looking to enter short positions, the primary sell zone lies between $88,000 and $90,000. This range aligns with several resistance factors:
The upper bound of the descending channel
Prior inducement rejection near $93,000–$94,000
The 21-day Simple Moving Average (SMA) around $90,507
Fibonacci 0.382 retracement from the all-time high (ATH) of $126,000
Entering short positions here offers a favorable risk/reward profile, assuming the bearish structure holds.
Invalidation and Stop-Loss Levels
Risk management is crucial in volatile markets like Bitcoin. The invalidation point for this bearish setup is a daily close above $94,500. This level represents:
Structure failure of the descending channel
Reclaiming of the 50-day Exponential Moving Average (EMA50)
If price closes above this threshold, it signals a potential trend reversal or at least a pause in the bearish momentum, prompting traders to exit short positions.
Liquidity Targets and Profit Taking
The trade plan includes three profit-taking targets based on support zones and liquidity pools:
TP1: $85,000
Near-term support zone with 30-day lows and Bollinger Band lower boundary convergence around $85,500–$85,900.
TP2: $82,000
Major demand zone supported by a rising trendline, prior liquidity sweeps, and the Fibonacci 0.5 retracement level.
TP3: $78,000
Extended target aligned with high timeframe fair value gaps (FVG), the 200-day EMA proxy, and macro risk-off conditions.
Reaching TP2 would nearly double the initial capital invested, reflecting a strong risk/reward ratio.
Risk Profile and Volatility Considerations
Bitcoin’s volatility remains high, with a 30-day Average True Range (ATR) of approximately 4.2%. This elevated volatility follows the significant correction from the ATH of $126,000. Key risk factors include:
Drawdown Risk: High, as 24 out of 31 technical indicators remain bearish.
Trend Strength: Moderate, with an ADX around 39 indicating a persistent downtrend but weakening momentum due to low volume contraction.
Success Probability: Estimated between 55% and 65%, factoring in oversold conditions like RSI near 36 and Stochastic around 10, which may trigger short-term bounces.
The maximum risk per trade is about 2.8%, consistent with professional risk models targeting 1–3% risk per position.
Institutional Liquidity Mapping
Institutional players often influence Bitcoin’s price through liquidity zones. The current bearish regime aligns with liquidity sweeps at key support levels, where stop-loss orders and buy orders cluster. Understanding these zones helps anticipate potential price reactions:
Liquidity pools near $82,000 act as strong demand zones.
Resistance clusters around $90,000 to $94,000 serve as supply zones where institutions may offload positions.
The descending broadening wedge pattern suggests a bear flag formation, often preceding further downside after brief retracements.
Mapping these liquidity areas aids in timing entries and exits more effectively.
Higher Timeframe Trend and Structural Alignment
The broader trend remains bearish across higher timeframes:
Price trades below all major moving averages (20, 50, 200-day).
The Ichimoku cloud remains red and above price.
The DMI’s -DI dominates despite minor bullish offsets.
The descending broadening wedge pattern confirms a post-ATH rejection structure.
This alignment reinforces the bearish bias and suggests caution for bulls attempting to enter prematurely.
Practical Trading Example
Consider a trader with $1,000 capital entering a short position at $88,500 within the identified resistance zone. The stop-loss is set at $94,500, limiting risk to approximately $2,800 per $100,000 position size, or 2.8% of capital.
If the price reaches TP2 at $82,000, the position would yield about $710 profit, a 71% return.
The risk/reward ratio stands near 2.5:1, favorable for disciplined trading.
This example highlights the importance of defined entry, stop, and target levels in managing risk and maximizing potential gains.
Summary of Key Points
📊 MCC Quant Research — #BTCUSD
Asset: Bitcoin / BTCUSD (Coinbase) Timeframe: Daily Market Regime: Bearish (Confirm using trend, momentum, structure alignment)
📊 MCC Investment Journal (Example: $1,000)
Bias: Bearish
Primary Entry (Sell): $86,000 – $90,000 (sell zone at resistance confluence with trendline and remaining bearish structure alignment)
Invalidation / Stop: $96,000 (structure failure above recent resistance and invalidation zone)
Liquidity Targets
TP1: $84,000 (near-term support liquidity)
TP2: $80,000 (major buy zone confluence)
TP3: $72,000 (extended lower liquidity pool)
Capital In: $1,000
Capital Out (TP2 est.): ~$1,680
Max Risk: ~3.5%
Risk / Reward: ~2.4 : 1
⚠️ Risk Profile
Volatility: High Drawdown Risk: High
Trend Strength: Moderate
Success Probability: ~52–62%
Total Risk Score: 68 / 100
⚠️ Legal Disclaimer (MANDATORY) This post is quantitative research and technical analysis for educational purposes only and does not constitute financial advice, investment recommendations, or solicitation to trade. Trading digital assets and securities involves substantial risk, including possible total loss of capital. Past performance does not guarantee future results. Always conduct your own research and consult a licensed financial professional before making investment decisions.