SKN | Bitcoin Price Struggles at $88,000 as Thin Holiday Trading Stalls Year-End Rally

Bitcoin is once again failing to generate a decisive year-end breakout, hovering below the $90,000 mark as thin holiday trading drains momentum from the market. Despite a modest bounce over the past 24 hours, the world’s largest cryptocurrency remains locked in a familiar range, highlighting the lack of conviction among traders as December draws to a close.

At the time of writing, bitcoin (BTC) was trading around $88,063, up roughly 1% on the day. Total trading volume stood near $40 billion, a subdued figure that reflects reduced participation typical of the holiday period. Price action has remained compressed, with BTC trading about 1% below its seven-day high of $89,201 and 1% above its seven-day low of $86,855.

With a circulating supply of 19.97 million BTC and a fixed cap of 21 million coins, bitcoin’s total market capitalization sits at approximately $1.76 trillion, marginally higher than a day earlier. Yet these headline figures mask a market struggling to find direction.

Range-bound price action dominates

Bitcoin pushed toward the $90,000 level for a second consecutive session earlier this week but failed to sustain the move. The rejection reinforces a broader consolidation pattern that has defined the market since October’s sharp sell-off from record highs.

Prices have largely oscillated between $85,000 and $95,000, forming a wide trading range that reflects uncertainty rather than trend continuation. That October drawdown followed bitcoin’s all-time high, when the asset was up nearly 30% year-to-date, marking a clear shift in sentiment.

As things stand, bitcoin is now down around 5% compared with last December, putting it on track for its first annual loss in three years. While prices briefly rose as much as 2.6% during periods of especially thin liquidity, those gains have repeatedly faded once activity normalized.

Derivatives reset weighs on momentum

One of the clearest explanations for the stalled rally lies in the derivatives market. Trading firm QCP Capital noted that activity dropped sharply following last Friday’s record options expiry, which reset positioning across the board.

According to QCP, open interest in bitcoin derivatives fell by nearly 50%, signaling that many traders chose to step back rather than roll positions into year-end. This withdrawal of leverage has dampened volatility but also removed the fuel needed for a sustained upside move.

The expiry also changed dealer positioning. Where options desks were previously long gamma — a setup that tends to stabilize price moves — they are now short gamma on the upside. In such an environment, even modest price increases can trigger hedging flows that exaggerate short-term moves, especially when liquidity is scarce.

A similar dynamic played out earlier in December, when bitcoin briefly approached $90,000. At that time, funding rates rose rapidly as traders crowded into bullish bets, creating a short-lived push higher before momentum reversed.

Elevated funding signals caution

That pattern appears to be resurfacing. Following the most recent expiry, Deribit’s perpetual funding rate surged above 30%, up from near-flat levels beforehand. Elevated funding costs increase the expense of maintaining long positions and often act as a natural brake on rallies, particularly in quiet markets.

From a technical standpoint, analysts note that bitcoin continues to reject lower levels within a broadening wedge pattern, suggesting downside momentum is weakening. However, resistance remains formidable.

Key levels to watch are $91,400 and $94,000. A convincing weekly close above $94,000 could open the door to higher targets near $101,000 and $108,000, but without a pickup in volume and participation, such a move looks difficult to sustain in the near term.

Waiting for conviction

For now, bitcoin appears caught between fading downside pressure and insufficient upside conviction. Holiday-thinned liquidity has amplified intraday swings but has not changed the broader structure of the market. As traders look ahead to January, the question is whether returning participation will reignite momentum — or confirm that the $90,000 level remains a ceiling until stronger catalysts emerge.