Bitcoin Trapped Until 2026 as Holiday Trading Drains Market Liquidity: QCP

Core Insights - Bitcoin remains range-bound with support at $85,000 and resistance at $93,000, marking its weakest year-end performance in seven years as liquidity thins and traders adopt a cautious stance [2][4] - A significant expiration of Bitcoin options is anticipated, with approximately 300,000 contracts worth $23.7 billion set to expire, representing over 50% of Deribit's total open interest [2][3] - Year-end tax-loss harvesting may increase short-term volatility in the crypto market, as investors can realize losses and re-establish positions without restrictions [4] Market Dynamics - Bitcoin's perpetual open interest has decreased by $3 billion, while Ethereum's has dropped by $2 billion, indicating reduced leverage and potential for sharp market movements [1] - Open interest in $85,000 puts has decreased from 15,000 to around 12,000 contracts, while $100,000 calls remain stable at approximately 17,000 contracts, suggesting some optimism for a potential rally [3] - On-chain data indicates weakening buying pressure, with a decline in active addresses and buy-volume divergence in Binance futures markets, reminiscent of the 2021 cycle structure [5][6] ETF and Investment Trends - Bitcoin ETFs have experienced significant outflows totaling $461.8 million over three days, with BlackRock and Fidelity leading the withdrawals, reflecting growing risk-off sentiment as the year ends [6]