Why the Christmas calm of Bitcoin might be setting up for a bigger move

Source: Yellow Original Title: Why Bitcoin’s Christmas Calm Might Be Setting Up for a Larger Move

Original Link: Crypto markets are closing out 2025 in a subdued state, with prices moving sideways and onchain activity cooling on major networks.

But beneath this Christmas calm, technical indicators and positioning data suggest markets may be approaching a decisive inflection point heading into 2026.

Bitcoin (BTC) and Ether (ETH) have mostly traded flat in recent sessions as seasonal inactivity weighs on volumes.

According to onchain data, activity has slowed across most chains, reflecting consolidation rather than a widespread exit from crypto markets. Analysts say this context is hiding a potentially key setup for the first quarter of 2026.

Onchain slowdown reflects consolidation, not capitulation

Jake Kennis, senior research analyst at Nansen, noted that the decline in activity at the end of December is consistent with year-end cooling rather than a breakdown of market structure.

He pointed out that active addresses, transactions, and fees generated have broadly consolidated over the past 30 days, with chains like Base experiencing notable retracements in decentralized exchange volumes after a strong start to the year.

Solana (SOL) continues to dominate onchain trading volumes despite a slight weakening in user activity, while BNB Chain remains a distant second.

“Overall, trading activity hasn’t disappeared; it has simply slowed down and become more selective as the year comes to an end,” Kennis said.

This selectivity, combined with subdued retail engagement, has left markets quiet but not directionless.

Bitcoin shows compressed price action according to technicians

According to a report from Fairlead Strategies, Bitcoin is consolidating within a narrow range above an ascending cloud support near $84,400, a level that has strengthened in recent weeks.

Fairlead’s analysis shows that the short-term risk-reward profile is tilted favorably, with daily momentum indicators still signaling bullish signs.

A break above the 50-day moving average, around $90,500, would act as a short-term catalyst, potentially opening the door toward the top of Bitcoin’s weekly cloud, currently near $109,000.

Importantly, Fairlead highlighted a loss of medium-term bearish momentum in Bitcoin’s weekly MACD histogram after oversold conditions—a technical pattern that has historically preceded rebounds.

Data suggests Bitcoin is “coiling” rather than breaking downward, even as longer-term momentum remains neutral.

Ether and altcoins could follow if momentum returns

Fairlead’s analysis also points to a potential underlying shift in the broader crypto market.

While most major altcoins remain in the lagging quadrant relative to Bitcoin, they show less bearish momentum—a setup that could allow rotation into altcoins if Bitcoin recovers.

Ether, in particular, seems well-positioned to outperform during a relief rally.

The Bitcoin-Ether ratio has flattened in recent weeks, and Fairlead noted that similar technical conditions preceded medium-term rallies in late 2024 and early 2025.

However, analysts warn that volatility is likely to persist.

Fairlead cautioned that weakened long-term momentum could make the first half of 2026 volatile, with the possibility of a subsequent cloud break and a test of Bitcoin’s long-term support near $70,000.