Bitcoin: How the most anticipated trade of 2025 fizzled

• ETF approvals drove early optimism
• Fed pivot boosted liquidity expectations
• GENIUS Act added regulatory clarity
• Price trades in bearish wedge warning of resumption of October rout

Summary

Bitcoin’s 2025 story was built on powerful catalysts: spot ETF approvals, a dovish Fed, and regulatory progress. The final quarter flipped the script. Price action now dominates the conversation, with BTC/USD coiling within a rising wedge following an extended bearish move. A break lower could open the door to November’s lows and beyond as we approach 2026.

Price action over hype: A reminder for 2026

Institutional access was the dominant bullish theme for Bitcoin in 2025. U.S. spot ETF approvals early in the year were heralded as a watershed moment, unlocking regulated exposure for both retail and institutional investors. Heavy inflows into products such as BlackRock’s IBIT reinforced the narrative that structural demand would tighten supply and underpin higher prices. Later, Vanguard’s move to allow its vast client base access to Bitcoin ETFs was seen as another game-changer, adding strength to the bullish case.

The macro backdrop added further conviction. A pivot from the Federal Reserve toward rate cuts and looser financial conditions was widely interpreted as a tailwind for risk assets, with Bitcoin positioned as a beneficiary of dollar weakness and liquidity expansion. Combined with persistent fiscal deficits and swelling money supply, the environment appeared tailor-made for digital assets to outperform.

Regulatory clarity was deemed another pillar of confidence. The U.S. administration pushed forward with the GENIUS Act, easing pathways for banks to engage with digital assets. Combined with the April halving, which tightened miner supply, the bullish narrative was clear: structural demand, constrained supply, and improving regulatory optics.

Yet, the script did not play out as expected. Despite the tailwinds, Bitcoin faltered in the final quarter, defying consensus and exposing the fragility of narrative-driven positioning. For me, this was the biggest surprise of 2025 and a valuable lesson, providing a reminder that price action trumps headlines. No matter how compelling the apparent catalysts, respecting the tape remains the ultimate discipline in trading.

Rising wedge signals risk of trend continuation

Source: TradingView

Over the course of 2025, it really was a tale of two halves, to borrow a sporting analogy, with BTC/USD ripping higher between April and July before stalling repeatedly above $123,000. That zone remains one to watch in 2026 if the price returns there. As things stand in the week before Christmas, the technical picture looks very different.

Bitcoin is sitting in a rising wedge following an extended downtrend, a setup that often warns of trend continuation. The price is now resting against the November uptrend, with a breach of this level opening the door for another potential wave of selling. If we see a sustained break of the uptrend, convention suggests we may see a retest of the 21 November low of $80,540. Should that be achieved, traders could assess whether to cut, hold, or reverse the position depending on price action at the time. Downside levels to watch include the 2025 year-to-date low around $74,500 and March 2024 high of $73,800.

Should downside risk fail to materialise with BTC/USD pushing above the October 2025 downtrend from the record highs, the 50-day moving average, $99,060, the 200-day moving average and $107,500 are topside levels of note.

With RSI (14) breaking its uptrend and moving further away from the neutral 50 level, downside pressure is building yet again, favouring bearish setups. While not yet confirmed by MACD, it too is curling over towards the signal line, moving closer to a crossover that would strengthen the bearish signal.