Bitcoin retreated to $86,000 this Thursday, December 18, 2025, after losing the initial momentum of a seemingly positive and cooling inflation report. The Bitcoin volatility in December intensified after several prominent analysts questioned the accuracy of the official government data published today. The leading cryptocurrency wiped out its gains in a drastic turn that left bullish investors in a vulnerable position.
The market initially reacted to the November Consumer Price Index (CPI), which showed inflation at 2.7%, lower than the expected 3.1%. Due to this, the digital asset’s price quickly jumped above $89,300 during the early hours of the trading session. However, the optimism faded when external economists began pointing out technical irregularities in the government’s calculation for this month.
Experts like economist Omair Sharif warned that official data omitted rental costs due to the recent and impactful government shutdown. Therefore, the inflation figure could be artificially low, which reduces the chances of a future interest rate cut by the Fed. This uncertainty caused the price to drop to $85,500 in an extremely short period of time for traders.
A Market Trapped Between Confusing Macro Data and Selling Fatigue
Nick Timiraos of the Wall Street Journal called the methodology used by the Bureau of Labor Statistics as something totally inexcusable today. Likewise, technology stocks on the Nasdaq managed to stay higher with a 1.7% advance despite the ongoing crypto chaos. The divergence between equities and digital assets highlights the fragility of current sentiment in the volatile market.
On the other hand, the derivatives economy reflects a cautious stance among traders looking to protect their short-term positions now. Data from Wintermute suggests that investors are selling protection below $85,000, hoping that this level will serve as solid support. The lack of a sustained breakout toward $100,000 keeps Bitcoin in a lateral and frustrating trading range lately.
Will the $85,000 Technical Support Hold Up Against the Pressure from Inflation Skeptics?
In the options market, sentiment toward Ether also shows a trend toward risk hedging over potential upside gains. Sell orders for levels above $3,100 indicate that there is little conviction in a massive rally before the end of the year. Traders prefer to safeguard their capital while the outlook regarding the Federal Reserve’s monetary policy becomes much clearer.
Finally, the probability of a rate cut in January remains stuck near 24% following the widespread confusion over the CPI data. Volatility is expected to persist as the market digests whether the inflation figures truly reflect the economic reality of the US. Bitcoin will need to demonstrate greater institutional strength to break the cycle of constant setbacks defining this period.
