QCP Asia: Bitcoin Range-Bound as Holiday Liquidity Thins

Quick Breakdown 

• Bitcoin and Ethereum perpetual open interest dropped by $3B and $2B, respectively, ahead of Christmas, increasing squeeze risk.
• Record 300k BTC options contracts (~$23.7B) expire this Friday, with max pain near $95k, influencing market dynamics.
• Holiday flows and tax-loss harvesting may amplify short-term volatility, but markets are likely to stay range-bound into 2026.

Bitcoin (BTC) remains range-bound heading into Christmas week, even as gold hits fresh all-time highs, Liquidity has thinned significantly as traders close positions ahead of the holidays. BTC perpetual open interest across major exchanges dropped by roughly $3 billion overnight, while Ethereum (ETH) perpetual OI fell about $2 billion. Although leveraged positions have declined, thin market depth keeps squeezing risk elevated, with BTC historically experiencing 5–7% swings during this period, often tied to year-end options expiries.

QCP said weakening liquidity ahead of the Christmas holiday and year-end institutional deleveraging have kept BTC range-bound. BTC and ETH perpetual open interest fell by roughly $3 billion and $2 billion, respectively. QCP added that year-end tax-loss selling could increase…

— Wu Blockchain (@WuBlockchain) December 23, 2025

Options expiry drives market dynamics

This Friday’s record expiry involves approximately 300k BTC option contracts, equivalent to $23.7 billion, along with 446k IBIT contracts. The Boxing Day expiry alone accounts for over half of Deribit’s total open interest, concentrated at $85k and $100k strikes, with a max pain level near $95k. Open interest for the $85k puts has eased, while $100k calls remain stable, reflecting limited optimism for a potential Santa rally. BTC risk reversals suggest less bearish sentiment than in the past month, with the curve gradually normalising toward pre-October levels.

Holiday flows and volatility considerations

Additional market pressures stem from tax-loss harvesting ahead of the December 31 deadline. Unlike equities, crypto investors can realise losses and immediately re-establish positions, a dynamic that can amplify short-term volatility in thin markets. Historical patterns show holiday-driven moves often mean-revert as liquidity returns in January. QCP Asia notes that, absent a decisive directional break, Bitcoin and broader crypto markets are likely to remain range-bound, caught between declining leverage, options-related flows, and conflicting narratives as 2026 approaches.

Meanwhile, BTC shows tentative signs of stabilization following dovish comments from Federal Reserve officials that have raised expectations of a December rate cut. Traders now price in roughly a 75% probability of a rate reduction next month, up from 30–40% just last Thursday, providing a potential tailwind for year-end market positioning.