Price Stagnates at Resistance Levels - Bitcoin and the Withering Liquidity Story

Market Summary - Weak Balance Between Recovery Efforts and Deep-Rooted Concerns

Bitcoin is currently swirling within the $81K–$89K range, far from the basic cost thresholds that once served as short-term support for coin holders. The price is now at $90.61K, but this stability is only superficial—beneath it lies a picture of declining liquidity and eroding confidence.

On-chain data tells a grim story: the short-term investor profit/loss ratio (STH) plummets to 0.07x, with real adjusted losses soaring to $403.4M daily. These figures are not just numbers—they reflect the mood of a market losing strength. The derivatives market shows a gradual deleveraging process, with funding at neutral levels, while options traders are accumulating hedging positions ahead of December trading.

This market universe remains filled with conflicting signals—short-term liquidity appears temporarily subdued, yet concerns over long-term tail risks remain deeply rooted.

On-Chain Data Perspective - When the Void Becomes Reality

###Unusual Price Chart

Continuous trading below the basic cost of STH (around $104.6K) since October has pushed Bitcoin into a vast, uncharted territory. This naturally invites comparisons to Q1 2022—a period when market demand was controlled and upward momentum lost steam.

The Active Realized Cap (average cost of the entire dormant supply) is now a key filter for determining future price levels. Bitcoin trading within the $81K–$89K range is no coincidence—it’s where old demand is being reclaimed from new demand. With limited capital inflows and thin liquidity levels step by step, any upward move becomes an all-or-nothing campaign.

###Increasing Perceived Losses

Now, let’s look at the so-called “Entity-Adjusted Realized Loss”—what actual holders are losing daily. This metric currently hits $403.4M per day (average over 30 days), a level unprecedented in the current cycle outside of the deepest lows. This is not a sign of health—it’s a warning that confidence is limited and market fragility is becoming apparent.

As holders gradually realize losses at this rate, what does it mean? It indicates that investors are no longer waiting—they are capitulating with losses. It reflects a downside trend that could continue without significant external demand intervention.

###Deep Liquidity Stress Signals

To understand better, we examine the “STH Realized Profit/Loss Ratio”—the ratio of new holders making money versus those losing. Since early October, this index has fallen from 4.3x to 0.07x—a decline analysts describe as a “sharp sign of weak liquidity.”

What does a 0.07x ratio imply? It means that for every dollar earned by investors, 14 dollars are lost. This dominance of losses is a clear indicator that history shows precedes worse liquidity phases. If this ratio remains low, the True Market Mean $81K could be reined in with significant strength.

###Long-Term Holders Outside but Not Fully Safe

We are approaching a more dangerous zone. Long-term holders (LTH)—those who typically hold Bitcoin through cycles—are beginning to sell for profit, but with diminished strength. The Realized Profit/Loss ratio for LTH has fallen to 408x (7-day average) from higher levels. While 408x remains above historical downturns, it still indicates increasing selling pressure from this group.

If this number drops to 10x or below—a threshold considered “capitulation” for long-term holders—the probability of a deeper bear market becomes unavoidable. History shows that every time LTHs sell at a loss, it signals upcoming significant volatility.

Derivatives Market - When Traders Choose Caution

###Gradual Deleveraging Without Chaos

Looking off-chain, open interest in futures continues to decline alongside price. But this isn’t a collapse—it’s a planned deleveraging process. Derivative traders are not reacting to forced liquidations (forced liquidation); instead, they are proactively reducing positions as prices weaken.

This is a positive structural signal—it means no impending “liquidation storm.” However, the flip side is: weaker leverage also means that if a major event occurs, the market may lack the “fuel” for a quick recovery.

###Funding Rate Stabilizing and Nervous Tension

Perpetual funding rates—the cost long traders pay short traders to maintain positions—are now oscillating around zero and even turning negative. This is very different from the “high funding” phases that often occur during overly optimistic markets.

Neutral or negative funding suggests: no one is truly committed to a direction. No dominant longs, no dominant shorts. It’s a “wait-and-see” environment—traders are cautious, weighing each step before placing bets.

###Options Open Interest Reaching New Highs

On the options side, open interest measured in BTC has hit all-time highs. In USD terms, the figure is still below the peak from a few weeks ago (when Bitcoin traded around $110K), but in coin volume, the story is different.

This indicates: traders are actively adjusting their positions around volatility. They are not just holding; they are rearranging hedges in preparation for what’s ahead—especially the late December expiry, which is forecasted to be one of the most decisive periods.

Options Map - When Rebounds Meet Walls

###Upside Blocked at $100K, Downside Still Open $84K

Current strike distribution tells a straightforward story: large put clusters around $84K, exotic calls near $100K. The zone between these levels— from $84K to $100K —is where the market is about to face significant volatility.

Gamma (—the rate of change of delta, or in other words, “volatility acceleration”)—will be highest near expiry and when prices are close to at-the-money strikes. This creates a perfect environment for sudden swings in late December.

Dealers are short gamma on puts (protection selling) and long gamma on calls (upside buying). This means: upside may struggle to break near $100K, while downside remains open. In short, the recent rebound could stall before breaking out sustainably.

###Short-Term Skew Eases but Long-Term Skew Remains Tense

The 25-delta skew shows the market has temporarily dismissed immediate collapse fears. The weekly skew dropped from a 18.5% put premium on Sunday to 9.3% on Tuesday morning. This is a clear shift—short-term hedging demand has decreased after the rebound.

However, the six-month skew tells a different story. Over the past two weeks, it has nearly doubled, indicating growing concerns that bearish scenarios could extend into 2026. Tail-risk hedging remains very strong, even as short-term fears ease.

###Theta Decay and Positive Carry Zone

Now, let’s discuss an important concept: decay. Theta decay (—also called time decay)—refers to the decline in options value over time, especially when the spot price remains relatively stable. Currently, the market has shifted into a “positive carry zone”—selling volatility becomes profitable.

This occurs because implied volatility (implied volatility) remains higher than realized volatility (realized volatility). Sellers of options benefit from this theta decay—they collect premiums from selling expensive options (based on volatility), and as long as Bitcoin doesn’t move too wildly, they profit from time decay. But if realized volatility suddenly spikes, this picture can reverse instantly.

###Persistent High Implied Volatility

Although one-month implied volatility has decreased by about 20 points from the weekly peak, it remains high compared to normal periods. This indicates the market still prices in significant risk for December. Out-of-the-money options expiring at the end of December still carry large premiums, reflecting high volatility expectations.

Capital Flows - The Tale of Exhausted Rebounds

###Downside Flows: From Panic to Caution

Options activity around puts clearly shows downside protection levels. Put demand has stabilized over the past four days, consistent with the rebound starting at $80.5K. This stability suggests: short-term hedging demand has eased, and the market is no longer panicked into buying puts as before.

Market sentiment has shifted from “emergency protection” to “cautious consideration”—a subtle but crucial difference. The probability of a prolonged deep decline is now priced lower than during previous sharp drops.

$80K Upside Flows: Selling Premium Instead of Buying Upside

On the upside, the flow tells a contrasting story. Despite the market’s recovery, the premium for call sales exceeds that for call purchases. This means: market participants are using the rebound to sell options rather than committing to further upside.

They are profiting from carry ###theta decay( instead of betting on a directional move. In short, the recent rally only dismisses short-term fears but does not convince anyone of a sustainable upward trend.

Conclusion - Hanging in the Balance

Bitcoin is still playing a tightrope walk from the $89K level. On-chain data shows weakness: STH Profit/Loss ratio drops to 0.07x, LTHs reduce leverage, and real losses are high. Thin liquidity and lack of demand are major barriers to any sustainable rebound.

Off-chain, the story remains cautious. Deleveraging is ongoing, funding is neutral, options open interest is rising but upside flows are fading. On the options front, theta decay has created an attractive positive carry zone for sellers, but this environment can be easily disrupted by unexpected events.

In summary: Bitcoin has not fully capitulated, but remains in a low-liquidity, low-confidence environment with hedged positions. Until prices reclaim major cost levels and new capital flows return, the market is likely to continue a cautious accumulation phase and protective stance.