Bitcoin price continued to hover around the $90,000 level during thin holiday trading, rising and falling in sharp moves that lacked the volume needed for a sustained breakout.
The world’s largest cryptocurrency rose about 2.6% during low-liquidity sessions and held above $86,000 during the week, but was unable to sustain its $90,000 level in Monday’s Asian opening hours, according to market data.
At the time of writing, the bitcoin price was trading at $87,465 on Tuesday, with a 24-hour volume of around $52 billion and little change over the past 24 hours.
The cryptocurrency is about 3% below the latest day’s high of $90,230, with a market cap of about $1.75 trillion based on a circulating supply of nearly 20 million BTC, according to Bitcoin Magazine Pro data.
QCP Capital said the move lacks the participation required to push prices decisively higher. In a note, the firm pointed to a sharp drop in open interest after last Friday’s record options expiration. Open interest fell by nearly 50%, signaling that many traders stepped aside.
Options affect market positioning
The expiry of the record options marked a turning point in the market structure. Dealers who were long gamma ahead of the event are now short gamma to the upside, QCP said. In this setup, rising prices force traders to hedge by buying spot bitcoin or short-term call options.
This dynamic can amplify price movements and create a feedback loop during bitcoin price rally.
QCP said a similar pattern emerged earlier this month when the bitcoin price briefly traded near $90,000. Funding rates rose rapidly as dealers adjusted positions, adding to short-term upside pressure.
Deribit’s perpetual funding rate rose to more than 30% post-expiration, up from an almost unchanged level previously. Elevated fund rates increase the cost of holding long positions and often reflect crowded bullish trades.
Strong activity was seen in the BTC-2JAN26-94K call option during the recent rally attempt. QCP said a move above $94,000 could extend the gamma-driven buying, but stressed that a breakout would require sustained spot demand.
The firm said that without real volume, upward moves risk fading.
The macro background adds to market volatility
Bitcoin’s recent push towards $90,000 earlier coincided with rising oil prices after renewed attacks on energy infrastructure in Russia and Ukraine dampened hopes for a short-term peace deal. Higher energy prices added to inflation concerns across global markets.
Bitcoin price traded higher in Asian hours as geopolitical uncertainty grew, but gave back all gains in the early US hours.
Longer term, proponents continue to frame bitcoin as a hedge against fiscal imbalances. The U.S. national debt has risen to about $37.65 trillion, according to official data.
Bitcoin price has critical support at $84,000
According to Bitcoin Magazine analysts, the broader bitcoin market continues to reject lower levels within an expanding wedge pattern, suggesting that downward momentum is weakening. Bulls must now build on this defense by breaking resistance at $91,400 and, more importantly, $94,000 to regain control.
A weekly close above $94,000 could open the door to a move towards $101,000 and potentially $108,000, although major resistance is expected along the way.
On the downside, $84,000 remains critical support. A breakdown there would likely send the bitcoin price towards the $72,000-$68,000 range, with deeper losses possible below $68,000.
Short-term liquidity may remain thin during the current holiday period, but large options expiring near $100,000 could influence price action.
The overall sentiment remains cautious, according to analysts, with bulls showing resilience but still needing confirmation.
At the time of writing, the bitcoin price is close to $87,000. During the Christmas holiday sessions, bitcoin bounced between $86,000 and $90,000.