QCP Flags Weak Conviction as Bitcoin Price Eyes $94K Squeeze

TLDR

• Bitcoin price rose 2.6% during thin holiday trading and held above the $86,000 level.
• QCP Capital stated that the move lacks the real volume needed for a sustainable breakout above $94,000.
• Open interest dropped by nearly 50% after Friday’s record options expiry, showing reduced market participation.
• Dealers shifted from long gamma to short gamma, which may create a feedback loop of spot buying as the Bitcoin price rises.
• Deribit funding rates surged to over 30% indicating high costs for maintaining long positions in perpetual futures.

Bitcoin price rose 2.6% in holiday trading, holding above $86,000, but analysts question the strength behind the move. QCP Capital said the rally lacks follow-through as open interest dropped sharply, pointing to sidelined capital. While buying pressure appeared, sustained momentum remains uncertain without stronger volume support.

Post-Expiry Shift Alters Market Structure

QCP Capital said post-expiry positioning shifted after last Friday’s record options expiry. Open interest fell by about 50%, showing traders stepped back. “This capital may be reallocated into spot, perpetuals, or other markets,” the firm explained in a note.

Dealers who were long gamma before expiry are now short gamma to the upside. As Bitcoin price rises, these dealers must hedge by buying spot or short-dated calls. QCP warned this creates a feedback loop that could drive further buying.

Deribit’s perpetual funding rate jumped to over 30%, up from nearly flat before the expiry. This shift reflects dealers adjusting to the new options landscape. QCP observed a similar setup when Bitcoin briefly touched $90,000 earlier.

The BTC-2JAN26-94K call saw heavy interest during that price spike. QCP said a move above $94,000 could extend this gamma squeeze. However, it emphasized that real buying volume is needed to sustain any breakout.

Bitcoin Price Holds While Traders Add Leverage

Despite reduced open interest, traders added $2.4 billion in leverage across December. CryptoQuant data shows Bitcoin and Ethereum futures grew by 7%, reaching $38 billion. “Bitcoin open interest rose from $22 billion to $23 billion,” the analyst reported.

Ethereum followed with a $1.4 billion increase, climbing to $15 billion during the same period. The Bitcoin price remained near $88,000 as traders continued positioning for a bounce. The Fear Index hovered at 27, showing low fear despite declining volume.

The last week alone saw $450 million in new leverage added to the market. Bitcoin positions rose 2% weekly as traders bet on recovery. Binance, Bybit, OKX, and Gate.io all showed ongoing accumulation activity.

The analyst stated, “True bottoms form when leverage clears, not builds,” calling current behavior inconsistent with capitulation. Retail investors leveraged up while whales withdrew 20,000 BTC. Professional traders exited even as longs paid high funding rates.

Technical Support and Long-Term Trends

Despite ETF outflows, the $86,000 level has held as support during recent pullbacks. The December 85K put was not rolled, reducing downside protection demand. QCP believes this shows weaker conviction for bearish bets.

Long-term holders sold only 2,700 BTC daily two days ago. That marked the lowest sell volume seen this year. The Bitcoin price continues to stay resilient in this low-volume environment.

Since January 2015, the Bitcoin price gained 27,701%, outperforming gold and silver over the same span. Gold rose 283%, while silver increased 405%, according to Adam Livingston. These returns reinforce Bitcoin’s historical growth performance.

Coinbase CEO Brian Armstrong said Bitcoin applies pressure on U.S. fiscal policy. “Bitcoin provides a check and balance on the dollar,” he told the Tetragrammaton podcast. He warned inflation without growth could threaten dollar stability.

U.S. national debt reached $37.65 trillion, rising by over $70,000 per second. The Joint Economic Committee provided the data. Bitcoin price could react to growing macroeconomic imbalances over time.

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