Bitcoin May Surpass $94K, But Needs Real Volume First, According to QCP

Bitcoin increased by about 2.6% during low holiday trading. However, QCP Capital has cautioned that this upward movement lacks the strength needed for a lasting breakout, as sharply diminished open interest indicates that capital is largely inactive as we approach the year's end.

Key Takeaways

QCP Capital suggests that while Bitcoin has rallied by 2.6%, real conviction and trading volume are needed for a sustainable breakout.
There’s a potential gamma squeeze above $94,000 as market dynamics shift from long to short gamma.
Despite a general sense of caution, traders added $2.4 billion in leverage in December, suggesting persistent optimism.
Bitcoin's performance has significantly outpaced traditional assets like gold and silver over the past several years.
Economic pressures continue as the U.S. national debt rises, highlighting Bitcoin's role in the financial landscape.

Bitcoin May Surpass $94K, But Needs Real Volume First, According to QCP

The Singapore-based trading firm noted that this rally seems to be propelled by spot and perpetual buying rather than forced liquidations, with only about $40 million in long liquidations during this price shift. This increase might be bolstered by renewed corporate interest, as Strategy’s Michael Saylor implied that more purchases could come overnight.

Gamma Risk Increases Above $94K as Dealers Shift Position

Following last Friday's record options expiry, market positioning has undergone significant changes. BTC perpetual funding on Deribit has jumped from near-zero levels to over 30%, indicating that dealers who were previously long gamma leading up to expiry have now switched to short gamma positions on the upside.

According to QCP's report, “As prices rise, these participants are compelled to buy spot BTC or near-dated Call options to hedge, which creates a feedback loop.” They observed this occurrence when Bitcoin momentarily surpassed $90,000, leading to aggressive buy actions in perpetuals and the BTC-2JAN26-94K call.

QCP highlighted that if Bitcoin maintains a position above $94,000, it could escalate this gamma-induced squeeze in the upcoming sessions. However, downside hedging has diminished since the substantial December 85K put was not rolled over, suggesting a decrease in near-term demand for protection, even with ongoing spot ETF outflows and consistent selling pressure during U.S. trading hours.

Support for Bitcoin has remained strong around the $86K range, despite recent declines, helping provide technical resilience.

Leverage Grows Despite Market Anxiety: $2.4B Added in December

While QCP indicates a lack of strong conviction among traders, data from CryptoQuant shows that $2.4 billion in leverage was added throughout December, despite a 40% drop in trading activity. Combined Bitcoin and Ethereum futures rose from $35 billion to $38 billion, representing a 7% increase in leverage even while expectations of market capitulation loom.

“Bitcoin open interest increased by one billion, rising from $22 billion to $23 billion, while Ethereum's open interest grew by 1.4 billion, jumping from $13 billion to $15 billion,” the analyst reported.

Bitcoin Rally QCP - BTC Open Interest Change on Exchanges Chart

This occurred while Bitcoin's price stabilized near $88,000 and the Fear Index remained at 27, indicating ongoing optimism rather than the despair usually seen before a market correction. In the last week alone, new leverage amounted to $450 million, with Bitcoin positions increasing by 2% weekly, as traders opened new positions counting on recovery instead of exiting during periods of weakness.

The analyst pointed out that exchanges like Binance, Bybit, OKX, and Gate.io demonstrated steady accumulation, maintaining or increasing positions instead of unloading risk throughout December’s downturn. This trend counters typical signals that indicate market capitulation, as they noted, “True bottoms form when leverage clears, not builds.” Funding rates have remained positive as traders paid to hold long positions even while major players withdrew 20,000 Bitcoin and professional money exited the market—while retail traders continued to leverage up.

Market Directions Unclear as Capital Stays on the Sidelines

QCP advised caution in drawing firm conclusions solely from options positioning, noting that open interest dropped roughly 50% following Friday’s expiry. “This capital may eventually be redirected into other asset classes or redeployed across options, spot, or perpetual markets, a shift that could reintroduce volatility once positioning is reestablished,” the firm stated.

Currently, Bitcoin is proving resilient above the $86,000 mark, despite several headwinds, while long-term holders reported just 2,700 BTC in daily sell volume two days ago—the lowest seen so far in 2025. Since January 2015, Bitcoin has delivered an astounding 27,701% increase, outpacing gold's 283% and silver's 405% appreciation during the same time frame, according to analyst Adam Livingston.

Coinbase CEO Brian Armstrong emphasized Bitcoin's vital role in putting pressure on U.S. policymakers to uphold fiscal discipline. He remarked, “Bitcoin provides a check and balance on the dollar,” during a podcast discussion, warning that persistent inflation without economic growth could jeopardize the dollar's status as a reserve currency.

Armstrong’s comments come as the U.S. national debt has surged to approximately $37.65 trillion, increasing by more than $70,000 every second, according to the U.S. Congress Joint Economic Committee.