QCP Capital: Year-End Tax Flows Could Fuel Volatility As BTC And ETH Open Interest Declines
Singapore-based digital asset agency QCP Capital reported that gold has reached new all-time highs, whereas Bitcoin has remained largely range-bound because the Christmas week approaches. Market liquidity has noticeably decreased as merchants shut positions forward of the vacations, with Bitcoin perpetual open curiosity throughout main exchanges dropping by roughly $3 billion in a single day and Ethereum perpetual open curiosity falling by about $2 billion, indicating that threat is being diminished slightly than shifted elsewhere.
Although leveraged positions have declined, the contraction in market depth retains the potential for sharp worth strikes elevated. Historically, Bitcoin has skilled 5 to 7% fluctuations through the Christmas interval, usually linked to year-end choices expirations slightly than new elementary developments. This Friday’s file choices expiry displays that sample, with roughly 300,000 Bitcoin choice contracts, equal to $23.7 billion, and 446,000 IBIT choice contracts scheduled to run out.
The Boxing Day expiry alone represents greater than half of Deribit’s complete open curiosity, with the very best concentrations at strike costs of $100,000 and $85,000, and a most ache level round $95,000. Over the weekend, spot costs have stabilized, with open curiosity for the $85,000 places declining from round 15,000 to roughly 12,000, whereas the $100,000 calls have remained comparatively regular at about 17,000. The $100,000 name, related largely with a name condor construction, now seems extra speculative however nonetheless suggests some lingering optimism for a Santa rally, albeit with restricted conviction.
BTC Market Stress Eases As Risk Reversals Normalize Ahead Of Year-End Options Expiry And Holiday Tax Flows
Indicators of market stress are additionally displaying indicators of easing as spot costs consolidate. Bitcoin threat reversals level to a much less bearish sentiment in comparison with the previous 30 days. While the curve retains a slight put skew, threat reversals are steadily normalizing towards ranges seen earlier than October tenth. A clearer view of draw back publicity is predicted after Friday’s choices expiry, significantly concerning whether or not the big $85,000 December places will probably be rolled ahead, closed out, or changed additional down the strike curve.
In addition to options-related flows, vacation worth actions could also be influenced by tax-loss harvesting forward of the December thirty first deadline, famous QCP. Unlike equities or exchange-traded funds (ETFs), the place wash-sale guidelines prohibit quick re-entry, cryptocurrency buyers can notice losses for tax functions and re-establish positions instantly. In skinny markets, this dynamic can amplify short-term volatility slightly than suppress it.
Nevertheless, holiday-driven worth actions have traditionally tended to revert to the imply. Similar to low-liquidity weekend spikes that retrace when markets reopen, worth motion throughout Christmas week sometimes diminishes as liquidity returns in January. Unless there’s a decisive breakout in both path that resets positioning and expectations for 2026, the cryptocurrency market is prone to stay range-bound, influenced by declining leverage, mechanical flows, and a mixture of competing market narratives.
At the time of reporting, Bitcoin is buying and selling at $87,448, reflecting a decline of greater than 1.85% over the previous 24 hours. The cryptocurrency reached a high of $90,260 and a low of $87,111 throughout this era. The complete market capitalization of all cryptocurrencies stands at $2.96 trillion, marking a 1.65% lower over the past day. Meanwhile, the overall buying and selling quantity throughout the cryptocurrency market prior to now 24 hours has risen to $99.55 billion, representing a rise of roughly 21.55%.
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