Bitcoin Stalls Just Below $90K as Holiday Liquidity Diminishes

Bitcoin is currently trading in a narrow range between $86,500 and $90,000 on December 31, sitting at $88,700 with a 0.9% increase over the past 24 hours, according to data from Coinbase and CoinMarketCap. This comes after repeated attempts to stay above the $90,000 mark during the week.

Key Takeaways

Bitcoin is trading between $86,500 and $90,000, currently at $88,700.
BTC has struggled to maintain momentum above $90,000 amidst low holiday trading volume.
Significant outflows from Bitcoin ETFs indicate ongoing market caution.
The upcoming month could bring changes in market positioning as liquidity improves.

The most recent rejection near $90,000 occurred after a brief increase above $89,000 on December 30, signaling a short-covering spike rather than fresh demand from long positions.

Market Dynamics and Trading Liquidity

Holiday trading conditions have intensified volatility, as thinner books can amplify the impacts of trading orders. U.S. exchanges reflect a 24-hour spot volume of Bitcoin around $34 billion, which is significantly lower than the highs of over $70 billion that were recorded around the all-time high of $126,279 on October 6. The subsequent liquidation on October 10 also contributed to a wave of losses for highly leveraged long positions.

Since that October event, funding rates and open interest have remained subdued, with December showcasing more range-bound trading than clear trends.

ETF Flows and Market Sentiment

Recent ETF flows mirror the current price movements. A report from CoinShares highlighted that digital asset products experienced a $446 million outflow during the week ending December 29. Among these, Bitcoin products alone accounted for $443 million, leading to post-October 10 outflows totaling $3.2 billion.

On December 29, daily U.S. spot Bitcoin ETF data revealed a net outflow of $19.3 million. However, December 31 saw a reversal with a net inflow of $355 million, breaking a week-long trend of outflows. This uptick included $143.8 million from BlackRock's IBIT and $109.6 million from ARKB, but it was still insufficient to push Bitcoin through the significant $90,000 barrier.

In addition to Bitcoin, other risk assets have shown similar trends, with the EUR/USD pair showing little movement and digital-asset indices recording declines of over 22% in Q4, due to a lackluster December "Santa rally."

Future Outlook and Market Positioning

The current holiday trading conditions reveal more than the price candles; Bitcoin's stability in the $86,500 to $90,000 range, alongside lower realized volatility and fluctuating ETF outflows, has set the stage for potential market repositioning in January.

Market players who reduced exposure after the October liquidation now face a Bitcoin price that is 30% below its $126,279 peak, with realized volatility subdued and substantial capital flowing into ETF channels in 2025 despite recent weekly outflows. This situation could create opportunities for re-risking if January sees a consistent positive flow.

For traders, it is essential to monitor the range of $86,500 to $90,000, keep an eye on U.S. ETF flow data, and assess the derivatives market once full liquidity resumes next week. Entry or exit decisions should be based on the assumption that any significant breach of this trading band during normal liquidity could shape risk sentiments across the crypto market in Q1.