QCP Capital

🇺🇸❤️ US Colour : All I Want for Christmas Is Liquidity Gold has pushed to fresh all-time highs 📈, while BTC has remained stubbornly range-bound heading into Christmas week. Liquidity is thinning meaningfully as traders close out positions ahead of the holidays. BTC perpetual open interest across major exchanges fell by approximately $3bn overnight, while ETH perpetual OI declined by about $2bn, a reminder that risk is being taken off rather than redeployed. Although leveraged positioning has come down, the contraction in market depth means squeeze risk in either direction remains elevated. Historically, BTC has tended to experience 5 to 7% swings during the Christmas period 🎄, a pattern often linked to year-end options expiries rather than fresh fundamental catalysts. This Friday’s record expiry is no exception. Roughly 300k BTC option contracts, equivalent to $23.7bn, alongside 446k IBIT option contracts, are set to expire. The Boxing Day expiry alone accounts for more than 50 percent of Deribit’s total open interest, with the largest concentration of strikes at 100k and 85k, and a max pain level clustered around 95k. However, with spot stabilising over the weekend, we have observed the open interest of the 85k Puts drifting lower, from around 15k to roughly 12k, while the open interest of the 100k Calls has remained relatively stable at about 17k. While the 100k Call, largely associated with a sizeable call condor structure, increasingly looks like a speculative punt, it nonetheless signals residual optimism for a Santa rally 🎅, even if conviction appears limited. Signs of market stress also appear to be easing as spot consolidates. BTC risk reversals indicate a less bearish tone relative to the past 30 days. While the curve remains modestly put-skewed, risk reversals are gradually normalising toward pre-October 10 levels. A clearer picture of downside positioning should emerge after Friday’s options expiry, particularly whether the large December 85k Puts are rolled forward, closed out, or replaced further down the curve. Beyond options-related flows, holiday price action may also be shaped by tax-loss harvesting ahead of the 31 December deadline. Unlike equities or ETFs, where wash-sale rules apply, crypto investors can realise losses for tax purposes and re-establish positions immediately. In thin markets, this dynamic has the potential to amplify short-term volatility rather than suppress it. That said, holiday-driven moves have historically tended to mean-revert. Much like low-liquidity weekend spikes that often retrace once markets reopen, Christmas week price action typically fades as liquidity returns in January. So unless we see a decisive break in either direction that meaningfully resets positioning and expectations for 2026, crypto is likely to remain range-bound, caught between waning leverage, mechanical flows, and a growing chorus of conflicting narratives. @QCP_Capital ❤️