Bitcoin Faces Volatile Holiday Trading as Breakout Momentum Falters
Despite relatively quiet holiday trade, the price of bitcoin has been seeing large ups and downs that don’t amount to a sustained breakthrough, keeping it hovering around the $90,000 mark. Throughout the week, the largest cryptocurrency in the world maintained a position above $86,000, seeing a 2.6% growth amid low-liquidity sessions. Market data shows that it had trouble staying over the $90,000 barrier. There was no change from the previous day in the price of bitcoin, which was $87,465 as of the most recent update, with a 24-hour trading volume of almost $52 billion.
With an estimated circulating supply of about 20 million BTC, the cryptocurrency is now trading at a price around $3,000 lower than its last daily high of $90,230. Its market value is around $1.75 trillion. From what we can see, there isn’t enough activity to significantly drive up prices. After a record-setting options expiration last Friday, the company saw a sharp decline in open interest. A significant number of traders have decided to exit the market, as open interest has dropped by about 50%. There will be a pivotal point in the market structure at the record options expiration. Dealers who were long gamma prior to the event have shifted to short gamma on the upside, according to a source. Here, dealers seek to mitigate price risk by acquiring either short-dated call options or spot bitcoin. When the price of bitcoin spikes, this dynamic might make the price changes much more pronounced and perhaps create a feedback loop. When the price of bitcoin temporarily approached $90,000 earlier this month, a same pattern was noted. There was instantaneous upward momentum as funding rates spiked as traders readjusted their holdings.
Deribit’s everlasting financing rate saw an impressive spike, increasing from almost flat levels to over 30% after the expiration. Rising financing rates indicate an excess of positive enthusiasm in the market and drive up the expenses associated with holding long holdings. During the recent rally attempt, there was notable trading activity in the BTC-2JAN26-94K call option. According to QCP, gamma-driven purchasing might be boosted if the price surges beyond $94,000. However, they did note that sustained spot demand is necessary for a breakout. Due to a lack of significant volume, the company warned that “any upward movements are at risk of diminishing.” With repeated assaults on energy infrastructure in Russia and Ukraine dampening chances for a rapid peace solution, Bitcoin’s latest surge past $90,000 happened at the same time that oil prices were soaring. Worries about inflation have intensified on a worldwide scale due to rising energy prices. As international tensions rose during Asian trading hours, the price of bitcoin rose as well. However, by the time the U.S. session began, the cryptocurrency had lost all of its gains. The argument for bitcoin as a safeguard against monetary anomalies has persisted over time. The United States national debt has grown to around $37.65 trillion, according to the most recent official estimates. According to a research, the larger bitcoin market is always rejecting lower levels within a widening wedge formation, which means that the impetus for the downside is fading.
The Bulls must strengthen this defensive by reclaiming control by piercing the $91,400 and, more critically, $94,000 resistance levels. With significant opposition anticipated along the way, a weekly closing above $94,000 would pave the door for a surge above $101,000 and perhaps $108,000. As a crucial support level, $84,000 should be considered on the downside. The price of bitcoin may drop to the $72,000–$68,000 area if the market has a breakdown; a drop below $68,000 would certainly lead to additional drops. While short-term liquidity may be limited during the current Christmas season, price swings might be influenced by noteworthy options expiries approaching the $100,000 barrier. Overall, analysts are predicting cautious attitude, with bulls showing resiliency but still needing confirmation. At the moment, the price of one bitcoin is close to $87,000. Bitcoin fluctuated between $80,000 and $86,000 during the Christmas holiday sessions.
