Headline: QCP Analysts Predict Potential Gamma Squeeze for Bitcoin if It Holds Above $94,000 Translation: QCP Analysts Predict Potential Gamma Squeeze for Bitcoin if It Holds Above $94,000

The first cryptocurrency experienced a rise of approximately 2.6% during the Asian trading session, mirroring the market behavior seen after Christmas Day. Analysts from QCP Capital attributed the spikes in volatility to the low liquidity prevalent in the festive market.

Experts pointed out that this increase was not due to a cascade of short liquidations, with the total volume of closed positions amounting to less than $40 million.

The primary catalyst behind this movement was the buying activity in a «thin market,» where few buyers and sellers result in low trading volume and high volatility. Additionally, Michael Saylor, the founder of MicroStrategy, may have generated further demand by hinting at new Bitcoin purchases, engaging more buyers in the market.

Analysts also noted a surge in the funding rates for perpetual contracts on Deribit, exceeding 30%. Following the options expiration on October 26, market makers adjusted their positions towards a «short gamma»: as prices rise, they are compelled to buy the asset for hedging purposes, creating a feedback loop.

This dynamic became evident when Bitcoin broke through the $90,000 mark. A sustained price action above $94,000 could trigger a full-scale gamma squeeze, accelerating the rally.

The support level at $86,000 held firm, despite outflows from ETFs and selling pressure during the American trading session. The demand for protective put options diminished, as larger players opted not to roll over their December puts with a strike price of $85,000.

QCP issued a cautionary note, stating that it is premature to draw conclusions regarding the long-term trend. Following a record expiration, open interest declined by 50%, with a significant amount of capital currently on the sidelines.

Trading activity is likely to continue with minimal momentum until the end of the year, with analysts expecting a resurgence of volatility as traders begin to reposition in January.

It’s worth noting that experts from Wintermute have highlighted a concentration of capital in Bitcoin and Ethereum.