Market Sentiment Turns Bearish: Bitcoin's 2025 Outlook

The Bitcoin landscape is experiencing a notable shift as traders are increasingly positioning themselves for the possibility that the cryptocurrency will close out 2025 under the $90,000 mark.

This bearish sentiment follows a recent dip where Bitcoin fell to a seven-month low of $89,970 on November 18, though it has since bounced back to $91,526 at the time of writing.

As the market adjusts, the mood among crypto traders has noticeably transformed, driven by a combination of capital flight and tightening macroeconomic conditions.

Options Market Indicates Bearish Sentiment

One of the clearest indicators of this bearish outlook is reflected in the options flows and prediction markets. According to the crypto options platform Derive.xyz, traders are currently estimating a 50% chance that Bitcoin will finish the year below the $90,000 threshold. This aligns closely with the views of crypto bettors on Polymarket, who assess a 36% likelihood that Bitcoin will wrap up the year under $80,000.

The trend of bearish positioning is apparent in the aggressive risk management strategies being implemented, signaling that professional trading desks are increasingly wagering against the previously dominant bullish sentiment.

Derive.xyz's analysis indicates that both short-term and long-term Implied Volatility (IV) for Bitcoin is on the rise. For reference, the short-term IV has surged from 41% to 49% in just two weeks, with long-term volatility (180-day) showing a similar trajectory, climbing from 46% to 49%.

This uptick in volatility suggests that traders are not perceiving the current downturn as a fleeting moment but rather as the beginning of a more extensive and profound shift in macroeconomic conditions and market sentiment.

Derive.xyz further elaborated:

“With ongoing concerns regarding the stability of the US job market and the likelihood of a December rate cut hovering just above a coin toss, there’s minimal motivation for traders to maintain a bullish stance as the year draws to a close.”

Moreover, the widening 30-day put skew—a measure that compares the premium for downside protection (puts) against the premium for upside exposure (calls)—serves as another confirmation of this pessimistic sentiment. The skew has plummeted from –2.9% to a notably defensive –5.3%, indicating that traders are not merely hedging but are also willing to invest significantly to guard against a substantial and prolonged decline.

This behavior is indicative of a market that is transitioning into a new volatility regime characterized by increased risk aversion as the year comes to an end.

This defensive positioning in the options market has been exacerbated by a dramatic reversal in the flow of funds within the Spot Bitcoin ETF segment.

Throughout much of 2025, these ETFs acted as crucial stabilizers, consistently absorbing supply and providing essential marginal bids. However, that role appears to have diminished significantly.

The extent of institutional withdrawal from Bitcoin ETFs is astonishing, with gross outflows nearing $3 billion this month alone ($2.5 billion net), according to data from SoSoValue data. This figure is on track to mark the second-largest monthly outflow since the introduction of these products in 2024.

As this landscape continues to evolve, traders and investors alike remain on high alert, closely monitoring macroeconomic indicators and sentiment as they prepare for potential volatility in the coming months.