CryptoQuant Signals Weakening Bitcoin Demand, Rising Volatility Anticipated Ahead Of Friday’s Options Expiry
In Brief
Bitcoin is experiencing weakening buying pressure, declining market participation, and heightened volatility, with potential downside toward $70,000–$56,000 ahead of a record Boxing Day options expiry.
CryptoQuant analyst Mignolet provided an update on the cryptocurrency market, highlighting a notable decline in buying pressure across both market and on-chain data. According to the report, buy-volume divergence in the Binance futures market has been steadily decreasing since August, a pattern reminiscent of the 2021 cycle, and this trend has not yet shown signs of recovery.
Simultaneously, the number of active addresses is falling sharply, indicating reduced market participation and overall activity. Price movements have followed a trajectory similar to 2021, suggesting that the current post-peak phase may represent a final distribution period. A market reversal has not occurred within the expected support zones, implying that recovery will require time.
CryptoQuant noted last week that a cryptocurrency bear market has effectively begun. Growth in Bitcoin demand has slowed considerably after three major spot-demand waves since 2023, driven by the U.S. spot ETF launch, the presidential election outcome, and Bitcoin treasury allocations. This slowdown indicates that most incremental demand from the current cycle has already been absorbed, removing a key source of price support.
Given these conditions, the firm projects downside risk for Bitcoin toward $70,000, with a potential further decline to $56,000 if the asset fails to regain upward momentum.
Bitcoin Faces Elevated Volatility Ahead Of Record-Breaking Boxing Day Options Expiry
Market perspectives on Bitcoin further trajectory remain mixed, with some analysts maintaining a bullish outlook while others anticipate near-term volatility.
After briefly reaching $90,000 intraday on Monday, BTC declined to approximately $87,400 the following day as per CoinMarketCap, continuing a multi-week pattern in which upward movements encounter immediate resistance. Timothy Misir, head of research at BRN, noted that the market tone remains cautious, with rallies showing limited follow-through and sell-offs being persistent yet moderate.
Capital flows on Wall Street reflected similar caution. US spot Bitcoin exchange-traded funds (ETFs) recorded $142 million in outflows on December 22nd.
Analysts widely agree that Friday’s Boxing Day options expiry has become the key near-term catalyst. Around 300,000 BTC option contracts, representing roughly $23.7 billion in notional value, are set to expire, accounting for over half of Deribit’s total Bitcoin open interest.
Jean-David Pequignot, Chief Commercial Officer at Deribit, described the expiration as “record-shattering,” with $28.5 billion in combined BTC and ETH options rolling off, double the volume of last year. Despite the scale, he characterized the market as “orderly,” noting that Bitcoin’s DVOL index remains near 45.
Positions are concentrated around the $85,000 and $100,000 strikes, which Jean-David Pequignot interpreted as residual optimism for a potential Santa rally, though overall conviction appears limited. Average funding rates have risen from 0.04% to 0.09%, indicating a build-up in leveraged longs even as market depth thins.
QCP Capital noted that traders are closing out risk rather than reallocating positions, with BTC perpetual open interest falling by roughly $3 billion overnight and ETH by about $2 billion. The firm warned that reduced liquidity increases the potential for price squeezes in both directions.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
