Bitcoin continues to trade sideways between $85,000 and $93,000 heading into the Christmas break, with thinning market liquidity and year-end de-risking sidelining participants. A sharp $3 billion drop in BTC perpetual open interest (and $2 billion for ETH) overnight has reduced leverage but heightened vulnerability to sudden swings, according to Singapore-based QCP Capital.

(Sources: )

Key Highlights

• Bitcoin trapped in consolidation amid the weakest year-end performance in seven years.
• Massive $23.7 billion Bitcoin options expiry scheduled for Boxing Day (December 26), representing over 50% of Deribit’s total open interest.
• Holiday-driven moves historically mean-revert once January liquidity returns.

Holiday Liquidity Vacuum Amplifies Risks

While gold has soared to new all-time highs with a 67% year-to-date gain, Bitcoin has failed to escape its tight range despite occasional tests of $93,000 resistance and $85,000 support.

The upcoming record options expiry on Friday includes roughly 300,000 BTC contracts worth $23.7 billion, plus 446,000 contracts on BlackRock’s IBIT. Open interest in $85,000 puts has eased from 15,000 to around 12,000 contracts as spot price stabilizes, while $100,000 calls remain steady near 17,000—reflecting lingering hopes for a late Santa rally amid subdued conviction.

Risk reversals indicate easing bearish skew compared to the past month, gradually normalizing toward pre-October levels as downside protection demand softens.

QCP notes that tax-loss harvesting before the December 31 deadline could inject short-term volatility, especially since crypto investors face no wash-sale rules and can immediately repurchase after realizing losses.

“Holiday-driven moves have historically tended to mean-revert,” the firm observed, comparing current low-liquidity conditions to weekend spikes that typically fade when full trading resumes.

On-Chain and Flow Indicators Flash Caution

Multiple on-chain metrics point to fading momentum:

• CryptoQuant highlights a persistent buy-volume divergence on Binance futures, reminiscent of 2021 patterns where price rose amid declining volume—a trend yet to reverse.
• Active addresses are dropping sharply, signaling reduced OTC and overall participation.

U.S. spot Bitcoin ETFs recorded $461.8 million in outflows over the past three days, led by BlackRock ($173.6 million) and Fidelity ($170.3 million), reflecting seasonal risk-off flows.

Institutions Hold Firm Through the Drawdown

Despite a >30% retracement from October highs, total holdings in U.S. spot Bitcoin ETFs have fallen less than 5%, underscoring institutional conviction.

“Selling pressure is primarily retail-driven from leveraged and short-term participants,” NoOnes CEO Ray Youssef told Cryptonews. He added that Bitcoin has not behaved like “digital gold” in 2025 due to heightened macro sensitivity, with future upside now linked to liquidity expansion, clearer sovereign policies, and broader risk sentiment.

VALR Co-founder and CEO Farzam Ehsani described the current period as one of the most challenging year-ends in recent memory, driven by seasonal weakness, lingering overbought conditions, and rotation into safer assets like U.S. Treasuries.

He outlined two plausible paths:

• The drawdown represents strategic accumulation by large players.
• A deeper macro-driven reset tied to Federal Reserve policy.

2026 Recovery in Focus

Ledn CIO John Glover anticipates continued volatility with prices potentially dipping to $71,000–$84,000 to complete “Wave IV” of the cycle, before a final “Wave V” push toward $145,000–$160,000. He expects the correction to play out over several months.

Ehsani sees potential for Bitcoin to reclaim $100,000–$120,000 as early as Q2 2026, with a new all-time high possible in the first half of the year.

Analyst Michael Van De Poppe noted that rejection near $90,000 is not yet bearish, provided $86,000 holds as support to build momentum for another assault on resistance.

Conclusion

With holiday liquidity at multi-year lows and a historic options expiry looming, Bitcoin appears poised for extended range-bound trading into early 2026. While near-term swings remain possible, most analysts expect meaningful directional resolution only after January’s return of volume and institutional flows.