Haciyev Reşit 
As the cryptocurrency market approaches the final days of the year, it is displaying a more cautious outlook due to declining trading volumes and investors’ tendency to close positions. Reduced liquidity during the holiday period is causing short-term price movements to become more volatile. A weekly report by Asia-based crypto advisory firm QCP Capital reveals a noticeable decline in leveraged trading and highlights a growing risk-off sentiment. According to analysts, this process may help reduce excessive speculation and allow the market to enter the new year on a more balanced footing.
Significant Decline in Leveraged Positions
One of the key highlights of the report is the sharp decrease in leveraged trading. According to QCP data, open interest in Bitcoin futures has fallen by approximately $3 billion, while open interest in Ethereum futures has declined by around $2 billion. This trend indicates a clear “leverage clean-up” in the market as year-end approaches.
QCP analysts commented on the situation as follows:
“As we approach year-end, trading volumes are declining. Many traders are closing positions, and liquidity is thinning. Thin liquidity can amplify price movements; however, as leverage decreases, excessive speculation is also being flushed out.”
Trading Volume Declines, Liquidity Weakens
According to QCP Capital analysts, both retail and institutional investors are increasingly closing positions as part of balance-sheet adjustments and risk-reduction strategies ahead of year-end. This behavior has led to a notable drop in trading volumes and weaker liquidity across the crypto market. Reduced liquidity makes the market more fragile, allowing relatively small buy or sell orders to have sharp and rapid impacts on prices.
Analysts warn that sudden upward and downward wick movements may become more frequent in this environment. However, the decline in futures open interest suggests that the unwinding of leveraged positions is significantly reducing excessive speculation in the market. QCP notes that while this process may increase volatility in the short term, it could lay the groundwork for a healthier and more balanced market structure in the medium term.
Downside Fear Eases in the Options Market
In addition to futures, notable signals are also emerging in the options market. According to QCP Capital analysts, there has been a clear reduction in put options targeting the $85,000 level for Bitcoin, while call options reflecting expectations around $100,000 continue to be strongly held. This indicates that investors’ belief in a sharp and sustained downside scenario has weakened, while medium- to long-term bullish expectations remain intact.
However, QCP also reminds investors that some selling pressure may emerge before December 31 due to tax-related obligations. Analysts note that such selling could create short-term pressure on prices, but given the current market structure, these pullbacks are expected to be largely temporary and unlikely to disrupt the broader trend.
Assessment
QCP Capital’s analysis suggests that the crypto market is entering year-end with a healthier and more balanced structure. While reduced liquidity may increase short-term volatility, the decline in leveraged positions could contribute to greater market stability over the medium term. The reduction in open interest for both Bitcoin and Ethereum indicates that risks are being gradually reduced ahead of the new year.
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