Bitcoin Ends 2025 in Red Despite Fed Rate Cuts, Strong CPI Data

The final business weeks of 2025 have been turbulent for Bitcoin. After being rejected multiple times at the $94,500 level following the US Federal Reserve’s rate cut, the asset faced further pressure. The week began with a sharp Monday afternoon sell-off, plunging from $90,000 to under $86,000 within hours. A brief recovery rally to almost $90,500 on Wednesday proved to be a ‘fake-out,’ as momentum evaporated, sending the price below $85,500.

All eyes then turned to Thursday’s release of US Consumer Price Index (CPI) data. Both the core and regular inflation metrics came in healthier than expected, typically a bullish signal for risk assets. Bitcoin’s reaction was telling: a fleeting jump from $87,000 to $89,500 was immediately met with selling pressure, driving the cryptocurrency to a multi-week low of $84,500. It has since found some support, trading around $88,000, but the failure to sustain gains on positive news highlights a significant shift in market sentiment. The weekly loss of 4.9% contributed to a painful 30+% drop from October’s all-time high above $126,000.

Bitcoin’s struggles were mirrored, and often exceeded, across the broader cryptocurrency market. Weekly losses were severe for other major assets: Ethereum (ETH) fell 9%, Solana (SOL) dropped 10%, Cardano (ADA) plunged 14%, Chainlink (LINK) lost 12%, and the token HYPE crashed 18%. The sole exception was Monero (XMR), which posted a 5% weekly gain. This broad-based decline occurred even as the total market capitalization held above $3 trillion, with Bitcoin’s dominance at 57.5%.

Beyond price action, conflicting narratives are shaping market analysis. On one hand, structural indicators are flashing bearish signals, with some analysts arguing that Bitcoin has definitively entered a bear market phase. On the other, a growing contingent believes the traditional four-year cycle is obsolete, pointing to metrics that suggest Bitcoin is now operating within a single, extended ‘supercycle.’ This fundamental debate over the market’s structural phase adds a layer of uncertainty for investors navigating the current downturn.

The price volatility unfolded against a backdrop of significant industry developments. In a major legal action, Terraform Labs’ court-appointed administrator sued Jump Trading for $4 billion, alleging the firm secretly profited by $1 billion from the collapse of the Terra ecosystem. Meanwhile, Coinbase’s Base network officially launched its tokenized ‘Everything App,’ aiming to consolidate social features, trading, and payments into one platform.

Other headlines underscored sector-specific pressures. The Ethereum network slumped to a 12-month low in activity, signaling a retail exodus, though data firm CryptoQuant noted such periods have historically been used for accumulation by long-term investors. Furthermore, Bitcoin itself faced a network-level challenge as China’s ongoing mining crackdown drove the global hash rate to a three-month low, raising questions about network security and miner distribution. Together, these stories paint a picture of a market grappling with regulatory aftershocks, technological evolution, and shifting participant behavior.