Bitcoin has recovered to around $92,000 after last week’s $2 billion liquidation event, but traders are taking a cautious positioning amid high volatility and looming central bank decisions.
According to market maker Wintermute, market activity has dropped sharply to bitcoin and Ethereumand investors prefer delta and carry neutral strategies over directional exposure to altcoins while awaiting clarity from the Federal Reserve and macro indicators.
The consolidation occurs after two months of macroeconomic uncertainty that caused strong turbulence in the markets. The total crypto market capitalization has recovered to approximately $3.25 trillion.
However, compressed base rates and subdued funding levels indicate limited appetite for leveraged positions ahead of this week’s Federal Reserve decision and the Bank of Japan’s interest rate announcement next week.
Source: Wintermute
Friday’s sharp drop was a blow to Bitcoin’s recovery, with cascading liquidations erasing roughly $4,000 in just over an hour.
The liquidation event wiped out roughly $2 billion in leveraged positions, briefly pushing Bitcoin below $88,000 before buyers stepped in at lower levels.
Despite the violent intraday movement, the market absorbed the impact without triggering sustained selling pressure.
Data from Glassnode shows that Bitcoin’s 14-day RSI rose from 38.6 to 58.2, while spot volume increased 13.2% to $11.1 billion.
This suggests that buyers remained active at the lows even as broader conviction remains mixed across on-chain, derivatives and ETF metrics.
Source: Glassnode Report
Year-end implied volatility remains high and traders are positioning themselves for either option $85,000 either $100,000 before December 26.
The options data reveals increased caution: the 25-delta bias reached 12.88% and the volatility spread turned sharply negative at -14.6%, indicating strong demand for downside protection despite the recent bounce.
Source: Glassnode
ETF flows have become a major hurdle, going from an inflow of $134.2 million to an outflow of $707.3 million.
Source: Glassnode Report
The reversal indicates profit-taking or weakening institutional interest following Bitcoin’s recent volatility, which is adding pressure to the near-term price action.
While ETF trading volume increased 21.33% to $22.6 billion and ETF MVRV increased to 1.67, substantial capital outflows suggest that some investors are taking advantage of elevated prices to reduce exposure.
Source: Glassnode Report
Speaking with Criptonoticias, Arthur Azizov, founder and investor of B2 Ventures, pointed out the impact of persistent withdrawals.