Throughout December, Bitcoin has been trading in the range of $85k-$92k. The options expiry on December 26th is expected to bring some volatility to the market.
QCP Capital, in their latest US Colour market update, mentioned that liquidity was thinning out as traders closed their positions before the holidays, leading to a drop in Open Interest for Bitcoin and Ethereum [ETH]. A 5%-7% price swing is anticipated by the end of the year due to the options expiries.
Friday’s record expiry saw $23.7 billion with approximately 300k BTC options contracts and 446k IBIT option contracts.
The Max Pain Point was at $95,000, with significant concentrations at $100k and $85k. How will this impact Bitcoin [BTC] price action?
Analysts Predict Bitcoin to Rebound Soon
Source: Joao Wedson on X
In a post on X, Joao Wedson, Founder and CEO of Alphractal, highlighted the current points of interest around Bitcoin. The Put/Call ratio stands at 0.38, and the Max Pain Point indicates a strong short-term price gravity towards $95k.
Source: Joao Wedson on X
In another post, Wedson used liquidation levels to outline his expectations.
Leveraged positions around $84k and $95k were visible on the heatmap as short-term price targets. BTC is likely to dip to $82k-$84k before rising to $95k and potentially higher.
David, another user, highlighted similar expectations. He noted that the $90k level might be a false ceiling, and $100k could act as a structural magnet. Initial flush levels were mentioned at $80k-$82k.
A move to $90k could trigger a breakout.
QCP Capital mentioned that this rally might not be sustainable.
“…holiday-driven moves tend to mean-revert historically. Similar to low-liquidity weekend spikes that often retract once markets reopen, Christmas week price action typically fades as liquidity returns in January.”
The holiday price action could be highly volatile as thin books face tax-loss harvesting from crypto investors before the December 31st deadline. These conditions might amplify short-term volatility instead of dampening it.
Final Thoughts
- The Friday options expiry is the largest of the year (quarterly + annual), amounting to $23.7 billion.
- Analysts predict a potential BTC dip to $82k-$84k followed by a rally towards the max pain point at $95k post options expiry.
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