Crypto Markets Slip as Year-End Caution Weighs on Bitcoin and Altcoins

Crypto markets edged lower on Sunday as a broader pullback in global risk assets extended into the final full trading week of the year. Investor sentiment remained cautious, pressured by concerns over elevated technology stock valuations, fading momentum in U.S. equities, and mixed policy signals from the Federal Reserve, all of which continue to influence digital asset prices.

Bitcoin price dipped around 0.5% to trade near $89,600, staying just above last week’s lows. Ether also moved slightly lower, hovering near $3,120. Most major cryptocurrencies followed the downward trend, with XRP, Solana, and Dogecoin recording losses of up to 2%, according to market data. The decline highlights how closely crypto assets remain tied to broader risk sentiment.

The weakness came despite a modest rebound in U.S. equity-index futures. Futures linked to the S&P 500 and Nasdaq 100 rose about 0.2% during Asian trading hours on Monday, recovering slightly after last week’s technology-led selloff. That selloff was driven by renewed scrutiny of aggressive artificial intelligence spending and doubts around long-term earnings sustainability. However, the small bounce in futures was not enough to restore confidence, as investors reassess whether lofty tech valuations can be justified heading into 2026.

This cautious mood has spilled into crypto markets, which have struggled to regain momentum following October’s sharp drawdown. Trading volumes have thinned considerably in recent sessions, a seasonal trend that has amplified price swings and reinforced a defensive tone among traders.

Market participants note that year-end positioning is playing a significant role. Many investors appear to be locking in profits and reducing exposure before reassessing new positions in early 2026. While short-term sentiment remains fragile, some supportive factors persist beneath the surface. Bitcoin ETF inflows in the U.S. remain net positive, and recent liquidity measures from the Federal Reserve could eventually support both equities and cryptocurrencies.

Still, analysts warn that thin liquidity conditions could exaggerate downside moves in the near term. Despite this, longer-term fundamentals such as institutional participation and central bank liquidity may provide a more constructive backdrop once markets fully reopen in the new year.