[Analysis] "Bitcoin continues range-bound trading amid year-end liquidity gap"

Bitcoin (BTC) achieved a short-term rebound amid the continuing year-end liquidity gap, but analysis indicates that the existing range-bound flow has continued rather than a clear directional move.

On the 29th (local time), QCP Capital said in a report, "Bitcoin rose about 2.6% in early Asian trading, but thin liquidity due to the holidays is distorting price movements." Considering that forced liquidations of long positions amounted to less than $40,000,000 during this rise, it was interpreted that spot and perpetual futures buying lifted prices rather than sharp short covering.

QCP also noted positioning changes after option expiry. Based on Deribit, the funding rate for Bitcoin perpetual futures exceeded 30%, putting dealers in a short gamma (Short Gamma) state to the upside. In fact, during the process of spot prices breaking above $90,000, hedging-driven perpetual futures buying and short-term call option demand were observed flowing in simultaneously.

However, hedges against downside risk were partly reduced. As the December-expiry $85,000 put option was not rolled over, downside defensive positions decreased, and overall open interest fell by about 50% after option expiry, indicating reduced conviction across the market.

The report added, "Capital remains in a wait-and-see phase, and a clear direction is likely to emerge only after liquidity normalizes." It analyzed that until trading participation recovers at the start of the year, Bitcoin is likely to continue oscillating within its existing price range.