The bitcoin price remained under $90,000, lingering around $80,000 as traders attempted another late push to recover year-end losses amid thin holiday trading. However, the market continued to lack the conviction necessary for a sustained breakout. The bitcoin price was recorded at $88,063 at the time of writing, reflecting an increase of approximately 1%, based on market data. Trading volume reached approximately $40 billion, indicating subdued engagement as December comes to an end. Bitcoin currently sits approximately 1% beneath its seven-day peak of $89,201 and around 1% above its seven-day trough of $86,855. The leading cryptocurrency boasts a circulating supply of 19,969,296 BTC, with a hard cap set at 21 million coins. Bitcoin’s total market capitalization stands at around $1.76 trillion, reflecting a 1% increase from the previous day. Bitcoin approached the $90,000 mark yesterday for the second consecutive session, but the rally encountered another halt. The price action is currently trapped within a wide range, oscillating between approximately $85,000 and $95,000. This range has characterized the market dynamics following a significant sell-off in October. The recent drawdown came on the heels of Bitcoin reaching its all-time high in early October, a period during which prices surged nearly 30% year-to-date. Since then, the mood has changed. The bitcoin price has dipped approximately 5% since last December, signaling a potential first annual loss in three years.
“I’d continue to expect exaggerated moves on light flow through New Year’s,” Jasper De Maere stated in a note. He warned traders to be cautious about depending too much on short-term signals until liquidity stabilizes to normal levels. The recent price stagnation stands in stark contrast to the broader recovery observed in traditional risk assets. Bitcoin kicked off the year with a robust rally, driven by enthusiasm surrounding crypto-friendly policies anticipated under the second Trump administration. The initial enthusiasm waned as uncertainty regarding President Donald Trump’s tariff agenda sent shockwaves through global markets. While U.S. equities have largely rebounded from those shocks, Bitcoin has faced challenges in regaining its momentum. The downturn in October was exacerbated by a surge of liquidations following the peak of leveraged positions at unprecedented levels. On Oct. 10, a significant sell-off occurred, flushing out long exposure and resetting market positioning. Interest in spot Bitcoin exchange-traded funds has seen a decline. Bloomberg reports that ETF outflows have hit approximately $6 billion in the fourth quarter, contributing to ongoing pressure as Bitcoin struggles to regain the $90,000 mark.
Holiday trading conditions have increasingly skewed price action. Earlier this week, the bitcoin price experienced significant volatility, fluctuating around $90,000 during low-liquidity sessions, with rapid gains and losses that failed to maintain momentum. Prices saw a brief uptick of approximately 2.6% in light trading, maintaining a position above $86,000 throughout the week. However, they once more struggled to hold above the $90,000 mark during the Asian trading hours. QCP Capital noted that the recent movements indicate a market lacking in participation. The firm highlighted a significant drop in derivatives activity after last Friday’s record options expiry. Open interest has seen a significant decline of nearly 50%, indicating that a considerable number of traders have opted to step back from the market. The options expiry has indeed shifted the short-term market dynamics. QCP reports that dealers who previously held long gamma positions ahead of the event are now positioned short gamma on the upside. Under these circumstances, increasing prices may trigger hedging actions that intensify short-term fluctuations, especially in times of low liquidity.
A comparable scenario unfolded earlier this month as the bitcoin price momentarily neared $90,000. Funding rates surged rapidly as traders flocked to bullish positions, generating brief upward momentum. Following the latest expiry, Deribit’s perpetual funding rate skyrocketed above 30%, a significant increase from the near-flat levels observed previously. Increased funding rates frequently signal an overheated market positioning, leading to higher costs for sustaining long exposure. According to analysts, the market is persistently rejecting lower levels within a broadening wedge pattern, indicating that downside momentum is losing strength. Key resistance levels are identified at $91,400 and $94,000. A weekly close above $94,000 might pave the way to $101,000 and $108,000, although significant resistance persists. On the downside, $84,000 continues to serve as a crucial support level. A drop beneath that threshold could propel the bitcoin price into the $72,000 to $68,000 range.