QCP: Christmas Week Liquidity Contraction, Cryptocurrency Market Maintains Range-Bound Trading

On December 23, QCP released its daily market note, noting that cryptocurrency market liquidity has weakened significantly as the Christmas holiday nears. While gold prices hit a fresh all-time high, Bitcoin has continued to trade in a narrow range. Data shows open interest for BTC perpetual contracts on major exchanges fell by roughly $3 billion overnight, with ETH perpetual contracts dropping by about $2 billion—signaling the market is actively deleveraging rather than repositioning. Contracted liquidity has raised the risk of two-way price pressure over the holiday period. Historically, Bitcoin typically sees 5-7% price swings during Christmas week, often tied to concentrated year-end options expirations. This Friday will bring a major expiration: around 300,000 BTC options contracts (valued at ~$23.7 billion) and 446,000 IBIT options contracts will expire. Over 50% of Deribit’s open interest is concentrated in these holiday expirations, with key strike prices at $100,000 and $85,000, and the largest pain point near $95,000. Recent data shows open interest for $85,000 put options has declined, while $100,000 call options remain relatively stable—reflecting limited bullish expectations for a “Christmas rally” in the market. Meanwhile, the risk reversal indicator shows sentiment has eased slightly from the past 30 days but remains slightly bearish overall. Analysts note that beyond options fund flows, year-end tax-loss selling could amplify short-term volatility in the low-liquidity environment. However, historical trends show holiday moves tend to mean-revert once liquidity returns in January. Without a clear directional breakout, the crypto market may continue ranging in the near term.