Bitcoin Trapped Until 2026 as Holiday Trading Drains Market Liquidity: QCP
Bitcoin stays range-bound heading into Christmas as thinning liquidity and year-end de-risking push merchants to the sidelines, with perpetual open curiosity dropping $3 billion for BTC and $2 billion for ETH in a single day, leaving markets susceptible to sharp strikes in both route regardless of decreased leverage, in line with QCP Capital.
While gold surged to fresh all-time highs, gaining 67% yr to this point, Bitcoin has failed to break free from consolidation between $85,000 assist and $93,000 resistance, closing out what analysts name its “weakest year-end efficiency in seven years.”
The compression comes forward of Friday’s record-breaking Boxing Day choices expiry, when roughly 300,000 Bitcoin possibility contracts price $23.7 billion, alongside 446,000 IBIT possibility contracts, will expire.
This, in line with QCP, represents over 50% of Deribit’s whole open curiosity.
Open curiosity in $85,000 places has drifted decrease from 15,000 to roughly 12,000 contracts as spot stabilizes, whereas $100,000 calls have held comparatively steady round 17,000 contracts, indicating residual optimism for a Santa rally regardless of restricted conviction.
Year-End Flows Amplify Volatility Risk
Bitcoin danger reversals present easing bearish sentiment in comparison with the previous 30 days, regularly normalizing towards pre-October ranges as draw back positioning softens, QCP noticed.
Tax-loss harvesting forward of the December 31 deadline may amplify short-term volatility, significantly since crypto buyers can notice losses and instantly re-establish positions with out wash-sale rule restrictions that apply to equities.
“Holiday-driven strikes have traditionally tended to mean-revert,” QCP acknowledged, noting that Christmas week worth motion sometimes fades as liquidity returns in January, “very like low-liquidity weekend spikes that always retrace as soon as markets reopen.“
Beyond choices flows, on-chain data reveals weakening shopping for strain throughout a number of metrics.
CryptoQuant analysis reveals a declining buy-volume divergence in Binance futures markets, resembling the 2021 cycle construction, the place worth continued to rise whereas quantity constantly declined, which is a pattern that has but to recuperate.
Active addresses are additionally declining sharply, indicating that on-chain OTC exercise and total market participation are fading.
Bitcoin ETFs have recorded $461.8 million in outflows over three days, led by BlackRock’s $173.6 million and Fidelity’s $170.3 million as year-end risk-off strain builds.
Institutional Holders Stay Steady Despite Drawdown
Despite a greater than 30% drawdown from October highs, U.S. spot Bitcoin ETF holdings have declined by lower than 5%, indicating institutional allocators are largely holding via the present downturn.
“Selling strain is primarily retail-driven from leveraged and short-term contributors,” Ray Youssef, CEO of NoOnes, advised Cryptonews.
Backing this, latest knowledge present that world crypto ETPs have attracted $87 billion in web inflows since U.S. Bitcoin ETPs launched in January 2024.
He added that Bitcoin “has not traded like digital gold in 2025” as a consequence of heightened sensitivity to macroeconomic elements, with upside now “tied to liquidity enlargement, sovereign coverage readability, and danger sentiment, somewhat than to financial debasement alone.“
Speaking with Cryptonews, Farzam Ehsani, Co-founder and CEO of VALR, additionally famous that “the top of this yr stays one of many tougher durations for cryptocurrencies in recent times, amid seasonal weak point, persistent overbought situations, and a return of investor curiosity to extra conservative devices, primarily US authorities bonds.“
He outlined two believable situations:
- Either the present drawdown displays strategic positioning by massive gamers forward of renewed accumulation.
- The market is present process a deeper reset pushed by macro headwinds and Federal Reserve coverage.
Recovery Timeline Extends Into 2026
Speaking with Cryptonews, John Glover, Chief Investment Officer of Ledn, expects “continued volatility with costs dipping to between $71k and $84k, which is able to kind the underside of Wave IV” earlier than the fifth and closing wave begins.
“My Wave V stays at $145k to $160k,” he acknowledged, although completion of the present correction “will take months to complete.”
Ehsani sees scope for Bitcoin to revisit the $100,000–$120,000 vary within the second quarter of 2026, noting that “a renewed historic worth high may happen as early as the primary half of 2026.”
Notably, Michael Van De Poppe additionally observed that rejection at $90,000 “isn’t a foul signal, as of but,” with markets clearly wanting “$86K to carry as assist” to offer sufficient momentum to problem resistance zones.
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