Market Maker Sounds Alarm: Volatility Persists in Thin Holiday Trading

As 2025 draws to a close, cryptocurrency markets are still volatile, with traders facing hundreds of millions in daily liquidations despite typically quiet holiday trading.

This persistent instability, marked by sharp price swings and failing rallies, reflects a market still struggling to recover from a historic crash and now grappling with structural uncertainty heading into the new year.

Heavy Liquidations Expose Fragile Year-End Market Structure

According to a recent report by market maker Wintermute, downside pressure intensified early last week, with Bitcoin (BTC) briefly breaking below $85,000 and Ethereum (ETH) falling under $3,000 before derivatives-driven selloffs took hold.

Liquidations topped roughly $600 million on Monday, followed by about $400 million each on Wednesday and Thursday, as steep rebounds were quickly sold into.

By the end of the week, activity slowed, and Bitcoin edged back toward $90,000, though that level again proved difficult to hold.

As reported by CryptoPotato on December 23, BTC failed to secure a clean break above $90,000 before retreating toward the high-$80,000 range, with daily liquidations still near $250 million. This struggle has placed Bitcoin on track for a near-24% loss in the fourth quarter, its weakest Q4 since 2018, according to Coinglass data.

Wintermute’s internal flow data points to a narrowing market. Buying interest is still focused on BTC and ETH, with institutional demand steady since the summer.

Meanwhile, retail traders seem to be moving out of smaller tokens and back into the majors.

The firm also noted that token unlocks and excess supply have continued to weigh on altcoins.

October’s Leverage Flush Still Hangs Over Sentiment

The choppy conditions are also linked to deeper scars left by a massive sell-off in October. Several analysts have argued that the crash, which wiped out more than $12,000 from Bitcoin’s price in a single day, damaged confidence in leverage-heavy trading. BTC is now down about 7% year to date and is heading for one of its rare red years, despite relatively strong fundamentals.

Wintermute echoed that caution, warning that price discovery is still happening “at the margin via derivatives,” leaving room for sudden air pockets when crowded positions unwind. Furthermore, funding rates remain compressed, options markets are pricing wide outcomes, and holiday trading desks are winding down, keeping liquidity thin.

Looking ahead, the market maker expects quieter conditions into year-end, with range-bound trading unless a clear macro or policy trigger appears. While institutional involvement continues to grow, the firm cautioned that near-term moves are likely to be driven more by positioning than conviction, keeping volatility elevated even with activity slowing.

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