Holiday trading was light, causing distortion in BTC price signals. Short-term direction needs to wait for liquidity to rebuild.

Market observations indicate that BTC prices exhibited typical low-liquidity phenomena during the holiday period. Data from December 29th shows that Bitcoin opened with an approximately 2.6% upward move, but the authenticity of this rally is questionable—during the holiday, trading activity was insufficient, leading to severe distortion of price signals.

Spot and Perpetual Dominance in the Uptrend, Liquidation Forces Absent

Unlike conventional markets, the current USD-denominated rise in BTC prices is mainly driven by spot accumulation and perpetual long positions, rather than technical resonance triggered by liquidations. This structural difference reflects a decreased market participation, with large funds tending to stay on the sidelines.

Data from the Deribit derivatives market better illustrates the issue: BTC perpetual funding rates have risen above 30%, indicating collective short hedging by traders, forming a “short gamma” market structure. Once BTC prices stabilize above the $94,000 level, it could trigger a chain of hedge buy orders, further pushing prices higher.

Options Market Reflects Funds’ Cautious Attitude

On the downside, the market also shows hesitation. Put options at the $85,000 level in December were not rolled over by traders, leading to a significant 50% drop in open interest after expiration. This phenomenon usually signals that market funds are in a wait-and-see mode, with divided opinions on the future direction.

Liquidity Return and Directional Delay

Overall, it is difficult for BTC to form a short-term directional breakout, as current market movements are more a “false prosperity” caused by holiday liquidity shortages. Only when trading liquidity is replenished can participants make clearer directional choices, allowing prices to reflect genuine market consensus.