Bitcoin soared to over $90,000 on December 29th, and after briefly pushing its market capitalization over $1.8 trillion, it retreated, exposing weak liquidity and reinforcing its bearish structure. Although selling pressure has eased, buyers remain hesitant, but rising funding rates and $1 billion in open interest indicate retail traders are betting on an economic recovery in January.
Technical rejection and liquidity vacuum
In the early morning hours of Dec. 29, Bitcoin (BTC) topped $90,000, briefly reviving hopes that the top cryptocurrency could end the year on a higher note. The nearly 2% increase also briefly pushed BTC’s market cap above $1.8 trillion, helping push the broader crypto economy’s market cap to over $3.1 trillion.
However, Bitcoin’s momentum peaked at a local high of $90,300 before fading. The rapid pullback below the $90,000 psychological threshold revealed a significant lack of liquidity at that level and a large overhead supply. This “fakeout” or rejection is reinforcing the prevailing bear market structure and suggests that the recent downtrend lacks the buying pressure needed to convert previous resistance into a new support floor.
Some analysts are skeptical that Bitcoin will reach its January 1st price of $93,500 by December 31st, pointing to the cryptocurrency’s price movements throughout much of December. They highlight sustained outflows from spot Bitcoin exchange-traded funds (ETFs) seen in the last two weeks of December as evidence that large companies are still in risk-off mode heading into 2026.
read more: Big Bitcoin squeeze: Bulls and bears prepare for a brawl
Bullish divergence in futures markets
According to market data, there has been only one net inflow into Bitcoin ETFs since December 15th. The rest of the day was dominated by spills. Moreover, the Fear and Greed Index, which was around 25 at the time of writing, once again suggests that the predicted “Santa Claus Rally” will not materialize. Meanwhile, technical indicators such as the Relative Strength Index (RSI) are currently hovering around the neutral 45-50 range, indicating a reset from the previous overbought state. This suggests that although aggressive selling has subsided, buyers have not yet taken full control.
Still, some market sentiment indicators suggest that investors are expecting a rebound in Bitcoin in January. For example, Cryptoquant data shows that Bitcoin’s funding rate, a key barometer of crypto sentiment, is at its highest level in more than two months, indicating growing demand for bullish bets in the perpetual futures market.
Meanwhile, the latest Cryptoquant market report points to a $1 billion increase in Bitcoin open interest as further evidence, dispelling the capitulation theory. Bitcoin positions increased by 2% weekly in December, with $450 million in new leverage added in seven days, according to a Dec. 27 report. The opening of new positions suggests traders are betting on an economic recovery.
“Binance, Bybit, and OKX showed steady accumulation. Gate.io led the expansion. All tracked exchanges held or expanded positions during the December selloff rather than eliminating risk. This contradicts a capitulation signal. True The bottom is formed when leverage unwinds, not rises. A fear index of 27 with increasing open interest suggests continued stubborn optimism. The market has not yet reached the level of desperation needed for an eventual washout,” the report concludes.
Therefore, while activity collapsed by 40% and whales withdrew 20,000 BTC, retail investors increased their leverage, as evidenced by the positive funding rate.
Frequently asked questions 💡
- What happened to Bitcoin on December 29th? BTC briefly rose above $90,000, but retreated below a key psychological level.
- Why did momentum stall after the $90,000 peak? High overhead supplies and thin liquidity led to quick rejections.
- Do ETFs influence year-end price movements? The continued outflows in December indicate that financial institutions remain risk-off heading into 2026.
- Can we expect a rebound in January? Higher funding rates and $1 billion in open interest indicate retailers are optimistic about a recovery.
