Bitcoin has experienced a volatile December, marked by a sharp sell-off followed by a tentative recovery, leaving traders at odds as to whether recent rallies signal a true comeback or a bear trap. While some analysts anticipate a "Santa rally," a significant number of market bears remain unconvinced, viewing any upward movement as an opportunity to sell. Here are three main arguments fueling their bearish sentiment:

1. Bear Flag Technical Pattern:

Several analysts have pointed to a classic technical pattern known as a "bear flag" forming during Bitcoin's recent recovery. This pattern typically emerges during downtrends and often resolves with another leg down. Mister Crypto, Celeb Franzen, and others have highlighted this bearish continuation pattern, suggesting that Bitcoin's price could easily plunge towards $80,000. Further analysis of the bear flag reveals a potential downside target for December around $77,100, calculated by adding the height of the previous downtrend to a potential breakdown point near the $88,000 support level. This represents a roughly 16% drop from current levels.

2. 2021 Fractal Repeating:

Another argument gaining traction among bears is the striking similarity between Bitcoin's current market structure and that of 2021. Analyst Leshka shared a BTC fractal illustrating a repeating double-top formation, a sharp breakdown into cycle support, and a deceptive rebound that ultimately formed a bull trap before a more significant crash. In the 2021 analogy, this trap preceded a prolonged decline that halved Bitcoin's value. The 2025 fractal exhibits a nearly identical setup, with the price hovering within the same support band before an expected breakdown. Leshka warns that if this pattern continues, Bitcoin could revisit the $40,000 region in early 2026.

3. On-Chain Data and Liquidity Concerns:

CryptoQuant CEO Ki Young Ju recently stated that "most Bitcoin on-chain indicators are bearish," tying this to a deteriorating global liquidity backdrop. CryptoQuant's metrics, including Bull Score, MVRV (market value to realized value), miner flows, and stablecoin liquidity, are signaling a potential bear market cycle. Declining miner reserves and flat to down stablecoin supply on exchanges suggest a lack of fresh capital to fuel further price increases. A Sahm Capital piece highlighted that global net liquidity has been falling for years due to inflation, rate hikes, and quantitative tightening, suppressing money flow and upside potential. This is further supported by the fact that institutions have been pulling out of Spot Bitcoin ETFs in December.

Broader Market Sentiment:

Adding to the bearish outlook, technical analysis suggests a potential drop to $74,000 in the coming weeks. The formation of a "Death Cross" and resistance at $94,000 indicate that Bitcoin may revisit its April lows before any sustainable long-term recovery begins. Wolfe Research believes the crypto market is split, with one faction anticipating a bear market and the other believing "the bottom is in on every bounce". Their own sentiment is in the middle, but they suggest Bitcoin could fall as low as $75,000.

While Bitcoin has shown resilience in the face of recent volatility, the arguments presented by market bears highlight significant risks that investors should consider. The combination of bearish technical patterns, historical fractals, and concerns about on-chain data and liquidity paints a cautious picture for Bitcoin's near-term future. The cryptocurrency is currently trading around $92,000. The price is caught between the $85,000 support and $100,000 resistance.