A wide Q4 gap between bitcoin and stocks could favor BTC in January, according to K33’s Lunde.

Bitcoin steadied in U.S. afternoon trading on Tuesday after early-session volatility, holding near the $87,500 mark and maintaining gains of about 2% over the past 24 hours.

Major altcoins moved in tandem, with ether, XRP and solana posting modest advances. Crypto-exposed equities also recovered following Monday’s sharp decline, as Strategy (MSTR) climbed roughly 3% and Coinbase (COIN) added around 1%.

“Positioning remains cautiously constructive,” said Josh Barkhoarder, head of sales at FalconX. “Most clients expect prices to stay range-bound in the near term until a clearer catalyst appears, so they’re keeping core bitcoin exposure while leaving excess capital in cash.”

Year-end rebalancing may favor bitcoin

Bitcoin’s relative underperformance this quarter could attract allocation-driven inflows as portfolio managers rebalance ahead of year-end, according to Vetle Lunde, head of research at K33.

Lunde highlighted a recurring pattern in 2025: when bitcoin lagged the S&P 500 in the first quarter, it rallied at the start of the second; when it outperformed equities in Q2, it weakened early in Q3. A similar setup may now be forming.

In the fourth quarter to date, bitcoin has trailed the S&P 500 by approximately 26%, suggesting that managers with fixed allocation mandates may need to increase exposure.

“Funds with predetermined bitcoin weightings may rebalance into year-end, potentially driving inflows in the final sessions of the year and into early January,” Lunde said.

Risk appetite remains muted

Even as prices stabilize, traders appear reluctant to add fresh risk. CME bitcoin futures activity remains near annual lows, with open interest around 124,000 BTC, Lunde noted.

Perpetual futures markets also reflect indecision, with funding rates near neutral and open interest largely unchanged. Meanwhile, spot trading volumes are down about 12% through last week, reinforcing signs that many participants are staying on the sidelines as the year winds down.