VanEck ChainCheck Reveals Bullish Undercurrents Despite Bitcoin’s Turbulent December

Bitcoin is navigating one of its most volatile months of 2025, with prices dropping nearly 9% in December and 30-day volatility surging past 45 — levels not witnessed since April. Yet beneath the choppy surface, VanEck’s mid-December ChainCheck report is uncovering a series of bullish signals that suggest the current pullback may be setting the stage for a stronger recovery heading into 2026.

TL;DR

• Bitcoin posts a nearly 9% decline in December 2025, with volatility at the highest levels since April
• VanEck’s GEO framework identifies improving liquidity conditions despite weak on-chain activity
• Speculative leverage has undergone a significant reset, historically a precursor to sustainable recoveries
• The U.S. dollar index hits a three-month low, creating a potential tailwind Bitcoin has yet to capitalize on
• Gold, silver, and copper surge to record highs while Bitcoin lags behind other hard assets

The GEO Framework: Reading Between the Lines

VanEck’s GEO framework — which evaluates Growth, Efficiency, and On-chain activity across the Bitcoin ecosystem — is designed to cut through daily price noise and assess the structural health of the market. The mid-December edition reveals a nuanced picture: on-chain activity remains subdued, but the two other pillars are flashing constructive signals.

Liquidity conditions are showing measurable improvement, even as spot prices drift lower. This means that market depth — the ability to execute large trades without significantly moving the price — is strengthening. At the same time, the speculative leverage that had built up during Bitcoin’s surge above $126,000 in October has been largely flushed out, reducing the risk of cascading liquidations that could drive prices even lower.

“Under our GEO framework, Bitcoin shows weak on-chain activity but improving liquidity conditions and a reset in speculative leverage, pointing to cautious optimism beneath the selloff,” VanEck states in its report. The asset manager’s analysis is particularly significant because similar patterns of leverage reset and improving liquidity have historically preceded some of Bitcoin’s strongest recoveries.

December by the Numbers

The numbers paint a picture of a market under stress but not in distress. Bitcoin has spent the majority of December confined to the $85,000–$90,000 range, with the October all-time high above $126,000 feeling increasingly distant. The 9% monthly decline represents the steepest pullback since the summer correction, and the volatility spike to 45+ on the 30-day reading indicates that large swings in both directions are occurring with uncomfortable regularity.

Yet the total crypto market capitalization remains above $3 trillion, and Bitcoin continues to dominate with a market share that has actually increased slightly during the pullback — a classic “flight to quality” dynamic within the crypto ecosystem. Ethereum is trading near $2,987, down roughly 1% on the day, while altcoins like Chainlink and Sui are posting modest declines of less than 1%.

The Dollar Disconnect

Perhaps the most intriguing macro dynamic on December 23, 2025, is the growing disconnect between the U.S. dollar and Bitcoin. The dollar index (DXY) is trading near its lowest level in three months, sitting just above a major support line that dates back to the 2008 financial crisis. The greenback’s decline accelerated throughout the first half of 2025 following the post-election rally in late 2024, and the choppy pattern near multi-year lows has persisted for months.

Traditional hard assets have responded as expected. Gold, silver, and copper are all trading at or near record highs, reflecting the inverse relationship between dollar weakness and commodity prices. Bitcoin, however, has decoupled from this dynamic since October, refusing to rally alongside other stores of value even as the dollar weakens further.

Analysts suggest several explanations for the disconnect. The post-halving cycle cooldown is one factor — the initial enthusiasm that followed the April 2024 halving has matured, and the market is in a transitional phase between the halving-driven rally and the next potential catalyst. The unwinding of leveraged positions built up during the October surge is another contributing factor, as forced selling from liquidated longs creates persistent overhead supply.

Tax-Loss Harvesting Adds to Year-End Pressure

Compounding the structural headwinds is the seasonal phenomenon of tax-loss harvesting. With the calendar year drawing to a close, investors are selling underperforming positions to realize capital losses that can offset gains elsewhere in their portfolios. The strategy is particularly pronounced among holders of crypto-related stocks, which have been among the worst performers of 2025 despite Bitcoin’s earlier rally.

Strategy (formerly MicroStrategy), Circle, and Gemini are all posting steep declines on December 23, far outpacing Bitcoin’s modest 1% drop. The selling pressure in these names is creating a negative feedback loop, as declining stock prices weigh on sentiment in the spot crypto market even though the fundamental thesis for Bitcoin remains intact.

Thin holiday liquidity is amplifying the impact of these flows. With many institutional traders and market makers already on vacation, relatively small sell orders can move prices disproportionately — a dynamic that works in both directions and could fuel an equally sharp recovery once liquidity returns in January.

Inflation-Adjusted Reality Check

Galaxy Digital’s Alex Thorn provides an important reality check on Bitcoin’s 2025 price performance. While the nominal high above $126,000 in October was celebrated as a new all-time record, the inflation-adjusted picture is less flattering. Measured in 2020 dollars, Bitcoin’s peak this year was approximately $99,848 — just shy of the six-figure milestone in real terms. With U.S. inflation having risen approximately 24% from 2020 to 2025, nominal price comparisons across years can be misleading.

This context is particularly relevant for investors comparing the 2025 cycle to the 2021 cycle. In purchasing power terms, the 2025 peak may not represent as significant a breakthrough as the headline number suggests, which could explain some of the reluctance among institutional investors to chase the rally at higher levels.

Options Market and the $85,000 Floor

The options market is playing an increasingly important role in Bitcoin’s price dynamics as December draws to a close. Large put gamma near the $85,000 level is functioning as a quasi-automatic floor, as dealers are forced to buy Bitcoin when the price dips toward that threshold. This dynamic is suppressing volatility within the $85,000–$90,000 range, creating a coiled-spring effect that could resolve violently in either direction.

The December 26 options expiry represents a potential catalyst. A large notional value of contracts is set to expire, and the resolution of these positions could determine whether Bitcoin breaks higher into January or slides toward the $70,000–$80,000 support zone that analysts have identified as a potential destination if the $85,000 floor gives way.

Why This Matters

The tension between Bitcoin’s weak surface-level price action and the improving structural indicators beneath the surface represents one of the most important dynamics for crypto investors to monitor as 2025 draws to a close. VanEck’s ChainCheck report provides a data-driven counterpoint to the prevailing bearish narrative, showing that the conditions for a sustainable recovery are quietly falling into place even as the market focuses on the 9% monthly decline and surging volatility. The dollar’s continued weakness creates a powerful potential tailwind that Bitcoin has yet to capitalize on, and the January return of institutional liquidity could serve as the catalyst that bridges the gap between improving fundamentals and lagging price action. For investors with a time horizon extending beyond the current tax-loss selling season, the VanEck analysis suggests that patience may be rewarded — but the path between here and recovery could remain volatile as the options market and year-end flows continue to dictate near-term price discovery.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, including the potential loss of principal. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.