Bitcoin has rebounded to around $92,000 after last week’s $2 billion liquidation event, but traders are adopting cautious positioning amid high volatility and looming central bank decisions.
According to market maker Wintermute, market activity has narrowed sharply into Bitcoin and Ethereum, with investors favoring delta-neutral and carry strategies over directional altcoin exposure while awaiting clarity from the Federal Reserve and macro indicators.
The consolidation follows two months of macro uncertainty that triggered strong market turbulence. Total crypto market capitalization has recovered to approximately $3.25 trillion.
Yet, compressed basis rates and subdued funding levels indicate limited appetite for leveraged positions ahead of this week’s Fed decision and next week’s Bank of Japan rate announcement.
Source: WintermuteMarket Absorbs Shock Without Follow-Through Selling
Friday’s sharp drawdown was a major blow to Bitcoin’s recovery, with cascading liquidations erasing roughly $4,000 in just over an hour.
The liquidation event eliminated approximately $2 billion in leveraged positions, briefly pushing Bitcoin below $88,000 before buyers stepped in at lower levels.
Despite the violent intraday move, the market absorbed the shock without triggering sustained selling pressure.
Glassnode data shows Bitcoin’s 14-day RSI climbing from 38.6 to 58.2, while spot volume increased 13.2% to $11.1 billion.
This suggests buyers remained active at the lows even as broader conviction remains uneven across on-chain, derivatives, and ETF metrics.
Source: Glassnode ReportYear-end implied volatility remains elevated, with traders positioning for either $85,000 or $100,000 by December 26.
Options data reveals heightened caution, with the 25-delta skew reaching 12.88% and volatility spread turning sharply negative at -14.6%, indicating strong demand for downside protection despite the recent bounce.
Institutional Flows Turn Negative Amid Growing Caution
ETF flows have emerged as a major headwind, flipping from a $134.2 million inflow to a $707.3 million outflow.
The reversal indicates profit-taking or weakening institutional interest following Bitcoin’s recent volatility, which is adding pressure to near-term price action.
While ETF trade volume rose 21.33% to $22.6 billion and ETF MVRV increased to 1.67, the substantial outflows suggest some investors are taking advantage of elevated prices to reduce exposure.
Speaking with Cryptonews, Arthur Azizov, founder and investor at B2 Ventures, noted the impact of persistent withdrawals.
“More than $2.7 billion has left BTC products over the past five weeks, and another $194 million left just in a single day,” he said.
“When such a row of withdrawals persists, the whole market becomes quieter and gets less support.“
However, MicroStrategy continues its aggressive accumulation strategy, recently purchasing 10,624 BTC for approximately $962.7 million at an average price of $90,615 per bitcoin.
The company now holds 660,624 BTC acquired for roughly $49.35 billion at an average cost of $74,696, with 2025 additions totaling $21.48 billion, just $500 million short of its entire 2024 accumulation.
Traders Prioritize Yield Capture Over Directional Bets
Futures open interest has declined to $30.6 billion, while perpetual funding rates have turned more supportive, with long-side payments rising to $522,700.
However, the compressed CME basis has driven growing interest in delta-neutral strategies in lower-cap assets, where carry opportunities remain attractive, confirming limited appetite for directional altcoin risk.
On-chain metrics show modest stabilization, with active addresses rising slightly to 693,035 and entity-adjusted transfer volume increasing 17.1% to $8.9 billion.
However, Realised Cap Change fell to just 0.7%, well below its low band, indicating softer capital inflows, while the STH-to-LTH ratio climbed to 18.5%, indicating continued dominance by short-term holders.
While speaking with Cryptonews, Ignacio Aguirre, CMO at Bitget, also warned of additional pressure from international monetary policy.
“A stronger yen raises the risk of unwinding yen carry trades, which is a move that can temporarily weigh on crypto valuations as leveraged positions reset across global markets,” he said.
Azizov emphasized key resistance levels ahead. “Only a strong move above $100,000 could flip the script, restore confidence, and open the way toward $120,000+ level,” he said.
“If that fails, a deeper pullback to the broad $82,000–$88,000 zone may be needed.“
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