Crypto Weekly Wrap: 24th December 2025
The $87k Fear Paradox: Why Markets Are Shivering on Christmas Eve
It’s Christmas Eve, 2025. While most of the world is wrapping gifts, the crypto market is trying to wrap its head around a strange contradiction. Bitcoin is sitting comfortably at nearly $87,000, a price that would have signalled euphoria just a few years ago. Yet, the Fear & Greed Index is flashing "Extreme Fear" (24).
In our time in crypto, we’ve learned that the loudest signals often come when the trading desks are quietest. Right now, the silence in the market is heavy. Volume is thinning out as institutional treasurers close their books for the year, leaving prices vulnerable to small shocks. If you're feeling anxious despite the high prices, you aren't alone, but you might be misreading the signal.
The Macro Lens
The traditional finance world has effectively hung up the "Closed for Holidays" sign. This week is less about economic data and more about liquidity management.
The Year-End Book Close: For corporate treasurers and fund managers, this week is about "window dressing" - settling positions to look good for the annual report. This often means selling winners to lock in bonuses or dumping losers to harvest tax losses.
The Liquidity Vacuum: With major bank desks running on skeleton crews until January 2nd, the "bid depth" (the amount of money waiting to buy at lower prices) disappears. This explains the jittery price action.
Don’t mistake holiday thinness for a structural crash. Low liquidity exaggerates moves in both directions. If you see a sharp wick down on Christmas Day, it's likely just a lack of buyers appearing, not a fundamental collapse of the asset class.
The Stocks Lens
Equity markets are drifting through a classic "Santa Claus Rally" phase, albeit a muted one.
The S&P 500 & Nasdaq: generally flat to slightly positive. The correlation here is crucial; stocks are in "cruise control," while crypto is in "panic mode."
The Divergence: usually, high-beta assets like Crypto follow the Nasdaq. The fact that Crypto is dipping while stocks hold steady suggests this is a crypto-specific rotation. Capital is likely moving out of riskier altcoins and into stablecoins (USDC/USDT) to sit out the holiday volatility.
Investment Takeaway: When stocks are calm, and crypto is fearful, it usually signals a "washout" of leveraged crypto traders rather than a macroeconomic event. This is healthy, even if it feels uncomfortable.
The Crypto Lens
The numbers paint a picture of a market holding its breath.
Bitcoin
Bitcoin ($86,970) is down 0.5% in 24 hours. It's defending the mid-$80k range. The fact that we aren't seeing a massive sell-off despite "Extreme Fear" is actually bullish. It means holders aren't folding; only the tourists are leaving.
Ethereum
Ethereum ($2,933) continues to struggle, failing to reclaim the psychological $3,000 barrier. It is lagging behind BTC, a trend that has defined much of late 2025.
Fear & Greed
Fear & Greed sits at 24/100. This is the most important metric of the week. To see "Extreme Fear" while Bitcoin is near all-time highs is rare. It suggests the market is climbing a "wall of worry."
When sentiment is this bad, but price is this high, it typically indicates a floor is forming. The weak hands have sold. The remaining capital is sticky. If you have cash on the sidelines, these periods of irrational fear often mark excellent entry points for long-term accumulation.
Notable Outliers
In a quiet market, volatility finds the edges.
Winner: Canton (CC) +26% (7d): While majors sleep, speculative capital chases new infrastructure plays. Canton's surge in a down week suggests a narrative rotation toward specific tech layers, ignoring the broader macro malaise.
Winner: Rain (RAIN) +15% (24h): A double-digit pop in a day suggests a specific catalyst or liquidity squeeze on a lower-cap asset.
Loser: Uniswap (UNI) -6.6%: A DeFi bellwether taking a hit often signals "risk-off" behaviour. Investors are pulling capital from decentralised exchanges to safety.
Loser: Mantle (MNT) -4%: Layer 2 tokens are bleeding against Bitcoin. This is classic "flight to quality" behaviour during uncertain weeks.
Sector Spotlight
The "Safety" Sector: Gold & Stables
It's not the sexiest sector, but it won the week. Looking at the broader market context, including ICONOMI's data (see below), the assets that held value were PAXG (Gold) and USDC.
Why it's happening: In December, "return of capital" matters more than "return on capital." Investors are parking gains in digital gold and dollars to avoid tax events or volatility during the holiday break.
A boring portfolio is a beautiful thing during a correction. If you felt pain this week, it's likely because you were over-exposed to high-beta altcoins without a stablecoin or gold hedge to dampen the volatility.
The Contrarian Take
The Fear is a Lie.
Everyone is looking at the "Extreme Fear" index and bracing for a crash. We could read it differently.
The herd is scared because price action is boring and funding rates are dropping. They are addicted to "up only."
We are essentially flat on the week (-0.5% on BTC). This isn't a crash; it's a nap. The anxiety is stemming from boredom and leverage exhaustion, not fundamental risk.
The most painful trade right now would be a rip upwards to $90k immediately after tax-loss selling ends on December 31st. The market is positioned for a drop; usually, the market punishes the majority view.
The ICONOMI Angle
The smartest strategies on the platform this week weren't the ones chasing the next 100x gem. They were the defensives.
Top Performer: Pecun.io (PCC) returned +1.44%.
Runner Up: Ethereal (BIF) returned +1.24%.
The Secret: Look at their holdings. PAXG (Gold) and USDC make up 50-75% of these portfolios.
Pure crypto strategies like Wisdom World were negative (-0.5% to -1.1%).
This confirms the value of active rebalancing. The winning managers saw the holiday liquidity crunch coming and moved into cash/gold. They didn't try to fight the tape; they stepped aside. If your personal portfolio is down this week, ask yourself: Did I have a defensive toggle, or was I all-in?
The Week Ahead
Dec 26 (Boxing Day): Traditional markets reopen in some regions; expect a slight volume uptick but continued choppy action.
Dec 31 (Quarterly Options Expiry): A massive amount of Bitcoin and ETH options contracts expire. This often pins the price to a "max pain" point until the bell rings.
Jan 1 (Tax Refet): The "January Effect" begins. Selling pressure from tax harvesting vanishes instantly. New capital allocations often enter the market on the first trading days of the year.
What to Watch Next
The $85k Line in the Sand: Bitcoin needs to hold this level. A break below on low holiday volume could trigger a "scam wick" down to $82k.
ETH/BTC Ratio: Ethereum is flirting with capitulation levels against Bitcoin. Watch for a bounce here as a sign of "Alt Season" returning in Q1.
Stablecoin Inflows: Watch the market cap of USDT and USDC. If these rise while prices are flat, it means gunpowder is being loaded for January.
FAQs
Why is the Fear Index so high if Bitcoin is at $87k?
It’s a paradox of expectation. Investors expected $100k by Christmas. When that didn't happen, disappointment turned to fear of a top. Technically, it indicates the market is oversold relative to its trend—often a buy signal.
Should I sell now to harvest tax losses?
(Not financial advice). You only have until December 31st. If you are holding "zombie coins" that are down heavily, selling them to offset gains from your winners is a standard strategy. This is why altcoins often bleed in late December.
What explains the performance of Gold (PAXG) tokens this week?
Global macro uncertainty and currency hedging. When crypto volatility looks unappealing, the tokenised efficiency of Gold allows crypto-natives to go "risk-off" without leaving the blockchain.
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