Santa’s Sleigh Doesn’t Have BTC In It

As we hit the halfway mark in December, crypto continues its rangebound trading, disappointing many who expected a Santa Rally going into the end of the year. Leading crypto BTC has repeatedly tested the mid $90k levels, only to face rejection and scurry back down the charts. After 3 red days in a row, BTC continues its march downwards on Monday morning, dropping down below $87k. Momentum is nearing its bottom on the downside at this time of writing, so we will see if this level gets defended in the order books. 

We have an interesting and packed week in macro, with NFP tomorrow, CPI on Thursday, some talks from Fed officials (Waller on Wednesday), and the BOJ Thursday night. With inflation above the Fed’s current level of 2%, a surprise to the downside in CPI combined with a weak jobs report could lead the market to expect more rate cuts. BTC’s continued chop (along with nearly every other major crypto) will need several positive macro events to break out of this pattern, as nothing is seemingly providing direction at this time. 

Perpetual futures funding rates are quite flat across the board on centralized exchanges for BTC, showing rates of around 3% annualized. DEX’s are seeing higher funding rates, around 11% annualized on Hyperliquid for example. This difference in rates will continue to be exploited by arbitrage traders, and BTC will continue its range in these types of market conditions. Options markets paint a similar picture, with trading occurring right around the money on both puts and calls for the year end expiry on Deribit of 26DEC25. Volume will continue to dwindle as the holiday season takes hold, with traders leaving their desks for the end of the year.