Bitcoin Drops Below $87K as Post-Holiday Crypto Selloff Intensifies

Bitcoin has broken below the crucial $87,000 support level in Boxing Day trading, marking a significant post-holiday correction that’s sending ripples across the entire cryptocurrency ecosystem. This decline represents more than just typical holiday volatility—it signals a fundamental shift in market dynamics as we approach 2026.

The timing of this selloff isn’t coincidental. December 26th has historically served as a critical inflection point for Bitcoin, often setting the tone for the following year’s price action. The failure to maintain the $95,000 Boxing Day benchmark that many expected creates a technical pattern I’ve observed repeatedly over the past decade: when Bitcoin misses key psychological levels during low-volume holiday periods, it often triggers cascading liquidations as algorithmic trading systems activate.

What makes this current decline particularly concerning is the convergence of multiple pressure points hitting simultaneously. The cryptocurrency market is grappling with an evolving regulatory landscape that’s creating uncertainty despite the Trump administration’s generally crypto-friendly stance. The SEC and CFTC are positioning for an aggressive 2026 agenda, with both agencies expanding their oversight capabilities. This regulatory overhang is forcing institutional investors to reassess their exposure levels.

Security breaches continue to erode confidence at critical moments. The Trust Wallet Chrome extension compromise, which resulted in private key harvesting and wallet drains, exemplifies the persistent infrastructure vulnerabilities that plague the space. When retail investors lose funds through security failures, it creates a psychological barrier that extends far beyond the immediate technical impact.

@yunaintern And wonder why crypto is crashing lol! I’m never touching crypto shitcoins

— Austin Myers (@Astomer96) December 26, 2025

The market structure itself has evolved in ways that amplify both upward and downward movements. The proliferation of leveraged products and derivative instruments means that relatively small price movements can trigger disproportionate liquidation cascades. When Bitcoin drops below key technical levels like $87,000, it activates stop-losses and margin calls across multiple exchanges simultaneously.

From a macroeconomic perspective, the current selloff reflects broader risk-off sentiment that’s driving investors toward traditional safe havens. Gold and silver are experiencing significant rallies, capturing capital that might otherwise flow into cryptocurrency markets. This flight to traditional assets suggests institutional investors are prioritizing capital preservation over growth as we enter 2026.

The XRP situation provides an interesting counternarrative to the broader market decline. Despite reaching new seven-year highs following the resolution of Ripple’s SEC case, even XRP is experiencing downward pressure in today’s trading. This demonstrates how systemic selling pressure can overwhelm individual positive catalysts—a phenomenon I’ve witnessed during previous major corrections.

Technical analysis reveals that Bitcoin’s current trajectory puts it at risk of testing the $80,000 level, which served as strong resistance during the previous rally phase. A break below this level could accelerate the decline toward the $75,000-$77,000 range, where I expect to see significant institutional buying interest emerge.

The cryptocurrency market’s maturation has created new dynamics that weren’t present during previous correction cycles. The integration of traditional financial products, including ETFs and institutional custody solutions, means that crypto price movements now correlate more closely with broader market sentiment. This correlation becomes particularly pronounced during holiday periods when liquidity is reduced across all asset classes.

Looking ahead, the foundation for recovery remains intact despite current weakness. Ethereum’s planned scaling improvements through zero-knowledge technology represent genuine technological advancement that could drive renewed institutional interest in 2026. However, the market will likely require several weeks to establish a new equilibrium following this correction.

The key catalyst for reversal will be the return of institutional buying pressure in early January. Corporate treasury allocations and ETF flows typically resume during the first quarter, providing the liquidity necessary to absorb selling pressure. Until then, expect continued volatility as the market works through this post-holiday adjustment phase.

This correction serves as a healthy reset after the significant gains achieved throughout 2025. The cryptocurrency market’s long-term trajectory remains positive, but investors must navigate these periodic retracements that are inherent to emerging asset classes.