The price of Bitcoin remains stagnant, hovering around $88,000, as traders exert effort to recuperate year-end losses within a framework of reduced holiday trading activity. The market has yet to demonstrate the necessary conviction for a substantial breakout beyond this threshold.
At the time of this writing, the Bitcoin price is noted at $88,063, reflecting an increase of approximately 1% over the last 24 hours, according to market data. Trading volumes are around $40 billion, indicative of subdued market participation as December approaches its conclusion.
Currently, Bitcoin is approximately 1% below its seven-day peak of $89,201 and about 1% above its seven-day trough of $86,855.
The largest cryptocurrency by market capitalization has a circulating supply of 19,969,296 BTC, with a predefined cap of 21 million coins. Bitcoin’s total market capitalization stands at approximately $1.76 trillion, representing a 1% increase from the previous day.
Recently, Bitcoin attempted to breach the $90,000 level for the second consecutive day before the upward momentum faltered once again. Price movements remain constrained within a broader range of approximately $85,000 to $95,000, a pattern that has characterized the market since a significant sell-off in October.
This decline followed Bitcoin’s all-time high earlier in October, when prices had surged nearly 30% year-to-date.
In the wake of this volatility, market sentiment has shifted. Bitcoin is now approximately 5% lower than it was last December, signaling the potential for its first annual loss in three years.
According to Jasper De Maere, desk strategist at Wintermute, “Exaggerated moves on light flow through New Year’s are to be expected.” He advised traders to exercise caution in interpreting short-term signals until liquidity normalizes.
This recent stagnation in price diverges from the broader recovery observed in traditional risk assets. Bitcoin began the year with a robust rally fueled by optimism regarding crypto-friendly policies potentially introduced under a second Trump administration. However, this enthusiasm has diminished as uncertainty surrounding President Trump’s tariff agenda has unsettled global markets.
Bitcoin Price Contending with Leveraged Traders
While U.S. equities have largely rebounded from these shocks, Bitcoin has faced challenges in regaining momentum. The downturn in October was exacerbated by a wave of liquidations after leveraged positions surged to unprecedented levels. A sharp sell-off on October 10 led to the liquidation of long positions, significantly resetting market dynamics.
Additionally, demand for spot Bitcoin exchange-traded funds has weakened. Data from Bloomberg indicates that ETF outflows have approached approximately $6 billion in the fourth quarter, contributing ongoing pressure as Bitcoin struggles to reclaim the $90,000 mark.
Distorted trading conditions over the holiday period have further impacted price behavior. Recently, Bitcoin exhibited notable volatility, swinging around the $90,000 level during periods of low liquidity, which resulted in rapid gains and losses that lacked follow-through.
Prices briefly demonstrated a 2.6% increase during these thin trading conditions, sustaining levels above $86,000 for the week but failing to maintain stability over $90,000 during Asian trading hours.
QCP Capital noted that recent market movements reflect a lack of participation. In a recent note, they pointed to a significant decline in derivatives activity following last Friday’s record options expiry, with open interest dropping nearly 50%, suggesting that many traders have opted to step back.
This options expiry has altered short-term market conditions as well. According to QCP, dealers who were long gamma prior to the event are now positioned short gamma on the upside. Consequently, rising prices may trigger hedging actions that amplify short-term market movements, notably during periods of low liquidity.
A similar scenario unfolded earlier this month when the Bitcoin price momentarily approached $90,000. Funding rates increased rapidly as traders flooded into bullish positions, exerting fleeting upward pressure on prices.
Following the latest options expiry, Derbit’s perpetual funding rate surged above 30%, a stark rise from nearly flat levels previously. Elevated funding rates often signify overheated market positioning and heighten the cost of sustaining long exposure.
Conversely, $84,000 serves as a critical support level. A breach below this threshold could lead to a decline in the Bitcoin price toward the $72,000 to $68,000 range.
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