December 31 | BTC Trend Analysis

Key Points

Current Price: $88,671 (as of 09:40 December 31)

Short-term Outlook: Technical analysis shows a battle between bulls and bears, with 1-hour and 4-hour charts indicating a short-term bullish structure (MACD golden cross, price above key moving averages), but daily and weekly charts remain neutral to weak. Funding rates in the derivatives market have turned positive, with short positions being liquidated more, combined with on-chain net outflows, suggesting a short-term range-bound movement between $87,400 and $89,000, with about a 60% probability. A breakout above the upper band could test resistance at $89,500-$90,000, while a breakdown could face cascading liquidations near $85,500, where over $1.33 billion in long positions are concentrated.

Key Support Levels: $87,411 (1h Bollinger lower band), $86,574 (4h Bollinger lower band), $85,669 (daily Bollinger lower band), $85,492-$85,585 (major long liquidation zone, totaling $1.33 billion)

Key Resistance Levels: $89,030 (1h Bollinger upper band), $89,559 (4h Bollinger upper band), $90,180 (daily Bollinger upper band), $88,000 (max pain point for options)

Technical Analysis

Multi-timeframe Momentum Assessment

Short-term (1h/4h) shows bullish structure:

• 1-hour MACD bullish crossover (174.06 > 154.54, histogram +19.52), price testing near the upper Bollinger band at $89,030
• 4-hour MACD remains strong (histogram +77.20), with the 12-period EMA ($88,180) crossing above the 26-period EMA ($88,041)
• RSI at 59.54 (1h) and 55.28 (4h), in neutral zone leaning slightly bullish, not overbought

Medium to long-term (daily/weekly) shows weakness:

• Daily MACD histogram rising (+325.06) but still in negative territory (-833.22), with the 12 EMA ($88,057) below the 26 EMA ($88,890), indicating a bearish alignment
• Weekly RSI at 38.48 approaching oversold, MACD deeply negative (-4,974), price near the lower Bollinger band at $79,360
• ADX across all timeframes indicates weak trend strength (1h 23.22, 4h 12.57, daily 17.86)

Support and Resistance Framework

Support Levels:

1. Near-term: $87,411 (1h BB lower) → $86,574 (4h BB lower) → $85,669 (daily BB lower)
2. Core: $85,492-$85,585, a high-density long liquidation zone with $1.33 billion in open interest; breaking below could trigger cascading liquidations

Resistance Levels:

1. Near-term: $89,030 (1h BB upper) → $89,559 (4h BB upper) → $90,180 (daily BB upper)
2. Options resistance: $88,000, the maximum pain point for near-term expiries, focal point for bulls and bears
3. Short liquidation zone: starting at $88,747 (liquidation band of $6.6M), with over $1 billion in short positions awaiting liquidation above $91,365

Derivatives Market Dynamics

( Open Interest and Funding Rates

Futures Open Interest: total $56.83 billion, down 2.09% in 24 hours, indicating cooling leverage

Funding Rates: mostly positive (Binance 0.0041%, Bybit/OKX 0.01%), longs pay shorts, with next settlement around 16:00 Dec 31, showing short-term bullish sentiment

Options Market: total open interest $27.74 billion (+3.55% in 24h), with Deribit holding 84.54%, with maximum pain at $88,000 for December and January expiries, exerting a magnetic pull on spot prices

) Liquidation Data

Total liquidations in 24 hours: $50 million:

• Shorts: $30.96 million > longs: $19.04 million
• Short liquidations dominate, indicating recent short squeeze potential and supporting short-term rebound momentum

On-chain Data Signals

Exchange Flows and Reserves

December 30 Data:

• Inflows: 36,534 BTC; Outflows: 42,009 BTC
• Net outflow: 5,475 BTC, indicating accumulation behavior

Reserves:

• Current reserves: 2,757,747 BTC ($243.87 billion), down 5,446 BTC from December 29
• Over 30 days, reserves decreased from 2,779,936 BTC to 2,757,747 BTC (-0.8%), showing liquidity reduction and selling pressure

Holder Behavior

Long-term holders (≥155 days):

• Net accumulation of +33,000 BTC in 30 days, first positive since July
• After selling over 1 million BTC during October correction, current supply stands at 14.34 million BTC (about 72% of circulating supply)
• HODL behavior shifting from distribution to accumulation, with improved confidence indicators

( Whale Activity

Large transfers on Dec 30-31:

• Outflow from Coinbase: 3,858 BTC ($339 million) and 800 BTC ($70 million) to unknown wallets
• Inflow to Antpool mining pool: 2,265 BTC ($199 million)
• Transfer to new wallets: 2,188 BTC ($192 million)
• Over 7,000 BTC moved from exchanges to private wallets, reinforcing holding rather than selling signals

Market Sentiment and Narrative

) Dominant Narratives

1. Institutional Accumulation: MicroStrategy added 1,229 BTC on Dec 29 (average cost $88,568), holding 672,497 BTC year-to-date, with a 23.2% return
2. Macro Expectations: FOMC minutes (Dec 30) and initial jobless claims (Dec 31) influence liquidity outlook
3. Technical Patterns: MACD bullish divergence and silver price analogy spark discussions on cycle shifts

Influencers and Community Views

Bullish:

• Continued institutional buying (e.g., Metaplanet increasing holdings), post-halving accumulation
• Macro support from QE expectations and easing cycle
• Technical support from bounce probability at Bollinger lower bands

Cautious:

• Price volatility with no clear direction (“violent chop”)
• Cycle top signals (lower highs, bear market roadmap) suggest extended correction into 2026
• Altcoin weakness dragging overall market confidence

Overall Sentiment: Mixed, leaning neutral to slightly bearish, with short-term focus on key levels and policy clarity; fear and greed indices in a tug-of-war

Conclusion

Bitcoin is at a critical juncture with mixed bullish and bearish signals. Short-term technicals and derivatives data (positive funding rates, short liquidations) suggest rebound potential, supported by on-chain net outflows and long-term accumulation. However, medium to long-term trend remains weak (daily/weekly bearish alignment, low ADX), and market sentiment is cautious, limiting upside.

In the next 24-48 hours, a range-bound movement between $87,400 and $89,000 is most probable. A breakout above $89,559 requires volume and bullish derivatives resonance, targeting $90,000-$91,000. Conversely, a breakdown below $87,400 could test the critical support zone at $85,500, risking cascading liquidations. Close attention should be paid to the $88,000 max pain point and macro data releases affecting liquidity.