Bitcoin rose slightly on Wednesday but is on track to end the year in negative territory, weighed down by heavy losses in the fourth quarter as low liquidity and a declining appetite for risk impacted the cryptocurrency market.
The world's largest cryptocurrency was trading 0.6% higher at $88,388.6 by 06:32 AM.
Bitcoin is on track to decline by more than 5% for the year, with losses in the fourth quarter alone exceeding 22%. It had reached a record high above $126,000 in October.
The sharp decline at the end of the year reversed earlier gains and left Bitcoin struggling to maintain key support levels as investors pulled back from riskier assets.
Bitcoin is headed for an annual loss after a 20% drop in the fourth quarter.
Bitcoin's weakness in late 2025 came after a strong rally in the fourth quarter of 2024, when prices surged following the election of Donald Trump as President of the United States.
At the time, markets priced in expectations that his administration would adopt a more supportive regulatory stance toward digital assets, boosting sentiment across the cryptocurrency sector and driving large inflows.
However, the optimism that persisted until early 2025 proved difficult to maintain. After posting strong gains during the first half of the year, Bitcoin lost momentum from mid-2025 onwards as global financial conditions tightened and investors became more cautious.
December's recovery attempts failed to gain momentum, despite seasonal expectations of a so-called Santa Claus rally. Bitcoin repeatedly struggled to reclaim its higher levels during the month, with each rebound met by renewed selling as traders locked in profits or reduced their exposure ahead of the year's end.
While institutional interest in digital assets continued, including ongoing activity in Bitcoin spot exchange-traded funds (ETFs), the inflows were not enough to offset the overall risk-averse tone in global markets.
Cryptocurrency prices today: Altcoins are quiet and headed for annual losses
Most alternative currencies continued their recent limited-range behavior on Wednesday, heading towards annual losses.
Ethereum, the world's second-largest cryptocurrency, fell 0.2% to $2,972.92 and is expected to lose nearly 12% for the year.
XRP, the world's third-largest cryptocurrency, remained unchanged at $1.87, heading for a 10% year-to-date decline.
For today, Solana rose slightly, while Cardano and Polygon fell by 1% each.
Among the meme currencies, Dogecoin and $TRUMP remained virtually unchanged.
