Bitcoin Holds $87.5K as Traders Eye Year-End Rebalancing Boost

Bitcoin traded near US$87,500 (AU$133,875) in US afternoon hours, holding roughly a 2% gain over the past day. This drop has put the asset’s market capitalisation at US$1.7 trillion  (AU$2.7 trillion).

Generally speaking, the crypto market has been through a few rough patches these last couple of weeks. 

Major altcoins such as Ether, XRP and Solana also edged higher. Crypto-linked equities rebounded after the prior session’s sell-off, with Strategy up about 3% and Coinbase up about 1%.

Related: US$4 Trillion JPMorgan Pushes Deeper Into Crypto With Ethereum Money-Market Fund

Waiting for a Clear Market Signal

Bitwise’s CIO, Matt Hougan, said 2026 is looking like a very good year for crypto. He has several predictions for the year, including that Bitcoin will buck its four-year cycle and its volatility will continue to go on a downward trend.

FalconX’s Josh Barkhoarder said client positioning remains defensive. Investors are maintaining core bitcoin exposure but keeping additional capital in cash while waiting for a clear market catalyst, implying expectations of range-bound trading in the near term.

Meanwhile, K33 Research pointed to a potential mechanical driver into the year-end. Its head of research, Vetle Lunde, said Bitcoin has lagged the S&P 500 by about 26% so far in the fourth quarter, which can trigger portfolio rebalancing by managers who run fixed allocation targets. 

In that setup, they may need to add BTC exposure in the final trading days of December and into early January to restore target weights. Lunde referenced prior quarters where relative underperformance was followed by subsequent strength, and relative outperformance was followed by weakness, framing the move as allocation-driven rather than sentiment-driven.

Lunde also noted that CME Bitcoin futures open interest remains near annual lows at roughly 124,000 BTC. In perpetual swap markets, funding rates (payments that keep perpetual prices aligned with spot) hovered near neutral and open interest was largely unchanged, indicating weak directional conviction. 

Moreover, spot trading activity has also softened, with volumes down about 12% through last week.

Read more: Strategy Scoops $980M in Bitcoin as BTC Slides Toward Annual Lows

The post Bitcoin Holds $87.5K as Traders Eye Year-End Rebalancing Boost appeared first on Crypto News Australia.