The bitcoin price has been fluctuating around the $90,000 mark amid light holiday trading, experiencing sharp rises and falls that are devoid of the volume necessary for a lasting breakout. The world’s largest cryptocurrency experienced a rise of approximately 2.6% during low-liquidity sessions, maintaining a position above $86,000 throughout the week. However, it struggled to hold onto the $90,000 mark during Monday’s Asian trading hours, as indicated by market data. As of the latest update, bitcoin was priced at $87,465 on Tuesday, experiencing a 24-hour trading volume of approximately $52 billion, showing minimal fluctuation over the previous day. The cryptocurrency is currently trading approximately 3% below its recent daily high of $90,230, boasting a market capitalization of around $1.75 trillion, based on a circulating supply of nearly 20 million BTC, as reported.
It is noted that the move does not have the necessary participation to drive prices significantly higher. The firm highlighted a significant decline in open interest after last Friday’s record options expiry. Open interest has dropped by almost 50%, indicating that a significant number of traders have opted to step back from the market. The record options expiry signifies a pivotal moment in the market structure. According to a source, dealers who were long gamma prior to the event have now shifted to being short gamma on the upside. In this scenario, increasing prices compel dealers to mitigate risk by acquiring spot bitcoin or short-dated call options. This dynamic has the potential to intensify price fluctuations and establish a feedback loop amid bitcoin price surges.
It is noted that a comparable trend was observed earlier this month when bitcoin’s price momentarily approached $90,000. Funding rates surged rapidly as traders recalibrated their positions, leading to immediate upward momentum. Deribit’s perpetual funding rate surged to over 30% after the expiry, a significant increase from the previously near flat levels. Increased funding rates raise the expenses associated with holding long positions and frequently indicate an overcrowded bullish sentiment in the market. Significant trading was observed in the BTC-2JAN26-94K call option amid the recent rally effort. QCP noted that a rise above $94,000 might amplify the gamma-driven buying, but emphasized that a breakout would necessitate ongoing spot demand. The firm indicated that in the absence of substantial volume, any upward movements are at risk of diminishing. Bitcoin’s recent surge toward $90,000 came alongside increasing oil prices, as renewed assaults on energy infrastructure in Russia and Ukraine stifled optimism for a swift peace agreement. Rising energy prices have intensified inflation worries throughout global markets. The bitcoin price experienced an uptick during Asian trading hours amid rising geopolitical uncertainty, only to relinquish all its gains in the early hours of the U.S. session. In the long run, advocates persist in positioning bitcoin as a safeguard against fiscal discrepancies. The latest official data reveals that the U.S. national debt has surged to approximately $37.65 trillion.
Report says that the broader bitcoin market is persistently rejecting lower levels within a broadening wedge pattern, indicating that downside momentum is losing strength. Bulls are now tasked with strengthening this defense by overcoming resistance at $91,400 and, crucially, $94,000 to reclaim dominance. A weekly close above $94,000 may pave the way for a surge toward $101,000 and possibly $108,000, although significant resistance is anticipated throughout the journey. On the downside, $84,000 continues to be a crucial support level. A breakdown could potentially drive the bitcoin price down to the $72,000–$68,000 range, with further declines likely if it falls below $68,000. During the ongoing holiday period, short-term liquidity might stay limited; however, significant options expiries around the $100,000 mark could impact price movements. Analysts indicate that overall sentiment is cautious, with bulls demonstrating resilience yet still requiring confirmation. As of now, bitcoin is trading close to $87,000. During the Christmas holiday sessions, bitcoin fluctuated between $86,000 and $90,000.