Bitcoin remains range-bound heading into Christmas as thinning liquidity and year-end de-risking push traders to the sidelines, with perpetual open interest dropping $3 billion for BTC and $2 billion for ETH overnight, leaving markets vulnerable to sharp moves in either direction despite reduced leverage, according to QCP Capital.
While gold surged to fresh all-time highs, gaining 67% year to date, Bitcoin has failed to break free from consolidation between $85,000 support and $93,000 resistance, closing out what analysts call its “weakest year-end performance in seven years.”
The compression comes ahead of Friday’s record-breaking Boxing Day options expiry, when roughly 300,000 Bitcoin option contracts worth $23.7 billion, alongside 446,000 IBIT option contracts, will expire.
This, according to QCP, represents over 50% of Deribit’s total open interest.
Open interest in $85,000 puts has drifted lower from 15,000 to roughly 12,000 contracts as spot stabilizes, while $100,000 calls have held relatively stable around 17,000 contracts, indicating residual optimism for a Santa rally despite limited conviction.
Year-End Flows Amplify Volatility Risk
Bitcoin risk reversals show easing bearish sentiment compared to the past 30 days, gradually normalizing toward pre-October levels as downside positioning softens, QCP observed.
Tax-loss harvesting ahead of the December 31 deadline could amplify short-term volatility, particularly since crypto investors can realize losses and immediately re-establish positions without wash-sale rule restrictions that apply to equities.
“Holiday-driven moves have historically tended to mean-revert,” QCP stated, noting that Christmas week price action typically fades as liquidity returns in January, “much like low-liquidity weekend spikes that often retrace once markets reopen.“
Beyond options flows, on-chain data reveals weakening buying pressure across multiple metrics.
CryptoQuant analysis shows a declining buy-volume divergence in Binance futures markets, resembling the 2021 cycle structure, where price continued to rise while volume consistently declined, which is a trend that has yet to recover.
Active addresses are also declining sharply, indicating that on-chain OTC activity and overall 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 pressure builds.
Institutional Holders Stay Steady Despite Drawdown
Despite a more than 30% drawdown from October highs, U.S. spot Bitcoin ETF holdings have declined by less than 5%, indicating institutional allocators are largely holding through the current downturn.
“Selling pressure is primarily retail-driven from leveraged and short-term participants,” Ray Youssef, CEO of NoOnes, told Cryptonews.
Backing this, recent data show that global crypto ETPs have attracted $87 billion in net inflows since U.S. Bitcoin ETPs launched in January 2024.
He added that Bitcoin “has not traded like digital gold in 2025” due to heightened sensitivity to macroeconomic factors, with upside now “tied to liquidity expansion, sovereign policy clarity, and risk sentiment, rather than to monetary debasement alone.“
Speaking with Cryptonews, Farzam Ehsani, Co-founder and CEO of VALR, also noted that “the end of this year remains one of the more challenging periods for cryptocurrencies in recent years, amid seasonal weakness, persistent overbought conditions, and a return of investor interest to more conservative instruments, primarily US government bonds.“
He outlined two plausible scenarios:
- Either the current drawdown reflects strategic positioning by large players ahead of renewed accumulation.
- The market is undergoing a deeper reset driven by macro headwinds and Federal Reserve policy.
Recovery Timeline Extends Into 2026
Speaking with Cryptonews, John Glover, Chief Investment Officer of Ledn, expects “continued volatility with prices dipping to between $71k and $84k, which will form the bottom of Wave IV” before the fifth and final wave begins.
“My Wave V remains at $145k to $160k,” he stated, though completion of the current correction “will take months to finish.”
Ehsani sees scope for Bitcoin to revisit the $100,000–$120,000 range in the second quarter of 2026, noting that “a renewed historical price high could occur as early as the first half of 2026.”
Notably, Michael Van De Poppe also observed that rejection at $90,000 “isn’t a bad sign, as of yet,” with markets clearly wanting “$86K to hold as support” to provide enough momentum to challenge resistance zones.
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