This article first appeared on GuruFocus.

Bitcoin (BTC-USD) is closing out the year on the sidelines, even as broader markets lean into seasonal optimism. The cryptocurrency is trading around $87,370, locked in an $85,000 to $90,000 range, and showing little of the volatility that once defined it. That contrast is becoming harder for investors to ignore. US equities have pushed higher into a Santa rally, lifting the S&P 500 to a record close, while gold has climbed to fresh all-time highs near $4,500 an ounce. Bitcoin, meanwhile, is down more than 7% for the year and has struggled to attract either risk-on enthusiasm or defensive flows.

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The inertia follows a sharp reversal earlier in the quarter. A heavy selloff in October pulled Bitcoin down from record levels, leaving it roughly 30% lower since that period and on track for its weakest quarterly performance since the second quarter of 2022, when the collapse of TerraUSD and Three Arrows Capital destabilized the industry. Since then, trading volumes have remained thin and retail speculation has faded. US spot Bitcoin exchange-traded funds have become net sellers in the fourth quarter, removing a source of demand that had previously supported price gains.

Several technical and structural factors are also weighing on sentiment. Bitcoin has fallen below its 365-day moving average near $102,000, a level that had acted as key support earlier in the cycle, raising the risk of a deeper pullback. A more than $23 billion options expiry later this week, combined with holiday-thinned liquidity, is discouraging directional positioning. At the same time, sustained selling by long-term holders has limited upside, even amid what some describe as an ultra-bullish news backdrop. While some market participants believe that selling pressure may now be easing and that Bitcoin could be trading in a value region ahead of next year, the asset is ending the year overshadowed by strength in stocks and gold rather than leading it.