Bitcoin moved sideways in U.S. afternoon trading on Tuesday after early-session volatility, hovering around $87,500 and holding gains of roughly 2% over the past day.
Major altcoins followed suit, with ether, XRP and solana posting modest increases. Crypto-linked equities also recovered from Monday’s sharp decline, as Strategy (MSTR) advanced about 3% and Coinbase (COIN) rose around 1%.
Client positioning remains cautious, according to FalconX. “In the near term, most expect crypto to stay range-bound until a clearer catalyst emerges,” said Josh Barkhoarder, head of sales at FalconX. “They’re maintaining core bitcoin exposure while keeping additional capital on the sidelines.”
Relative underperformance may support inflows
Bitcoin’s weak showing versus traditional markets in the fourth quarter could prompt portfolio rebalancing as the year draws to a close, said Vetle Lunde, head of research at K33.
Lunde highlighted a recurring pattern in recent quarters: bitcoin rallied early in Q2 after underperforming the S&P 500 in Q1, while strength in Q2 was followed by softness at the start of Q3. A similar dynamic could be developing again.
To date in Q4, bitcoin has lagged the S&P 500 by roughly 26%, raising the likelihood that managers with fixed allocation mandates will adjust exposure.
“Fund managers with predetermined bitcoin targets may rebalance toward year-end, potentially driving inflows in the final trading sessions of the year and into early January,” Lunde said.
Risk appetite remains subdued
Despite price stabilization, traders appear hesitant to add new positions. CME bitcoin futures open interest remains near yearly lows at around 124,000 BTC, Lunde noted.
Perpetual futures markets also reflect indecision, with funding rates close to neutral and little change in open interest. Meanwhile, spot trading volumes have declined about 12% through last week, suggesting many participants are stepping back as the year winds down.
