Bitcoin Stuck Until 2026 as Holiday Trading Slows Down Market Liquidity: Insights from QCP

Bitcoin finds itself within a tight trading range as we approach Christmas, with dwindling market liquidity and year-end adjustments causing traders to hold back. This situation has led to significant reductions in perpetual open interest for BTC and ETH, leaving markets prone to sudden movements in either direction. Despite gold reaching new heights, Bitcoin has struggled to rise above its established support and resistance levels, marking one of its weakest year-end performances in recent years.

Key Takeaways

Trading Range: Bitcoin is stuck between $85,000 support and $93,000 resistance, marking a weak performance as year-end approaches.
Open Interest Drop: A sharp drop of $3 billion in BTC open interest indicates decreased trading activity.
Volatility Risks: The end of the year may bring volatility due to tax-loss harvesting by investors.
Institutional Stability: Despite a drop of over 30% from its October peak, institutional holders have maintained their positions with minimal outflows from Bitcoin ETFs.
Future Projections: Analysts are predicting that recovery may stretch into 2026, with potential price increases anticipated in the latter half of the year.

Bitcoin's Current Trading Landscape

Bitcoin’s trading remains limited as we near the Christmas season. Market liquidity is thinning, and many traders are on the sidelines. According to QCP Capital, open interest in perpetual contracts dropped significantly: $3 billion for BTC and $2 billion for ETH overnight. This decline leaves the markets susceptible to sharp price movements, even with diminished leverage.

Gold has seen a remarkable increase of 67% year-to-date, climbing to new all-time highs. In contrast, Bitcoin continues to remain trapped in a consolidation phase, oscillating between $85,000 for support and $93,000 for resistance. Analysts describe this current period as Bitcoin's “weakest year-end performance in seven years.”

As the market looks ahead to Friday’s options expiration, which involves approximately 300,000 Bitcoin option contracts valued at $23.7 billion, along with 446,000 IBIT contracts, QCP points out that this represents over 50% of total open interest on Deribit.

Bitcoin Holiday Trading - Bitcoin Open Interest Chart

The number of open interest in $85,000 puts has slightly decreased from 15,000 to about 12,000 contracts as the spot price stabilizes. Meanwhile, $100,000 calls have remained steady around 17,000 contracts, suggesting a hint of optimism for a year-end price spike, albeit with limited confidence.

Year-End Flow Risks Heighten Market Volatility

Bitcoin's risk reversals exhibit a shift away from prior bearish sentiment as it progressively normalizes towards pre-October levels, according to QCP. This trend suggests that the bearish positioning has softened.

The practice of tax-loss harvesting, especially before the December 31 deadline, could further elevate short-term market volatility. Crypto investors can realize losses without facing wash-sale restrictions that apply to traditional equities, providing them with more flexibility.

QCP noted that “holiday-driven moves have historically shown a tendency to revert,” implying that the price fluctuations observed during the Christmas week typically settle down once market liquidity resumes in January.

Additionally, the analysis of on-chain data indicates diminishing buying pressure. CryptoQuant highlights a falling buy-volume divergence in Binance futures markets, similar to patterns seen in the 2021 cycle, where the price rose in tandem with declining volume—a trend that has yet to recover.

Bitcoin Holiday Trading - Bitcoin: Taker Buy Volume - Binance Chart

Moreover, the number of active addresses is sharply decreasing, indicative of waning market participation and on-chain OTC activity.

Bitcoin Holiday Trading - Bitcoin Active Addresses Chart

Recent data indicates that Bitcoin ETFs encountered a significant outflow of $461.8 million over three days, with BlackRock and Fidelity leading these withdrawals.

Institutional Investors Show Resilience Despite Market Drops

Despite Bitcoin seeing a more than 30% decline since its October peak, U.S. spot Bitcoin ETF holdings have decreased by less than 5%, signaling that institutional investors are largely maintaining their positions during this downturn.

Ray Youssef, CEO of NoOnes, explained that the current selling pressure is chiefly from retail investors who are using leveraged positions or are short-term traders. Supporting this view, recent data shows global crypto exchange-traded products (ETPs) have attracted $87 billion in net inflows since the launch of U.S. Bitcoin ETPs in January 2024.

Bitcoin Holiday Trading - Cumulative Net inflows into Global Crypto ETPs

Youssef remarked that Bitcoin “has not traded like digital gold in 2025” due to a higher sensitivity to macroeconomic conditions. Future price movements are now “linked to liquidity expansion and overall market sentiment, rather than solely monetary debasement.”

Farzam Ehsani, CEO of VALR, also emphasized that this end-of-year period presents challenges for cryptocurrencies, attributed to seasonal weaknesses and a renewed interest in traditional investment vehicles like U.S. government bonds.

He forecasted two potential scenarios for the market:

The current drawdown may represent strategic positioning by large players in anticipation of future accumulation.
The market could be experiencing a more substantial reset influenced by macroeconomic challenges and Federal Reserve policy changes.

Future Projections Extend Into 2026

In a conversation with Cryptonews, John Glover, Chief Investment Officer of Ledn, predicted “continued volatility,” forecasting that prices may drop to between $71,000 and $84,000 as part of the ongoing correction, before entering what he describes as Wave V, which could reach between $145,000 and $160,000.

“The completion of the current correction process will likely take months,” he cautioned.

Bitcoin Price Chart

Ehsani suggested that Bitcoin could revisit the $100,000 to $120,000 range by the second quarter of 2026, indicating that a historical price peak might be achievable as soon as the first half of 2026.

Michael Van De Poppe also noted that rejection at the $90,000 level “isn’t a bad sign, as of yet,” highlighting that a level of $86,000 needs to hold as support to gain the momentum necessary to approach resistance zones.