As the end of the year approaches, you will see these scenes more frequently:
Without major news, BTC can suddenly spike 1% to 3%
Near key integer thresholds, there are repeated 'false breakouts/false breakdowns'
At night and on weekends, 'flash rises and crashes' are more likely to occur
A single spike sweeps away stop losses, and the price goes back as if nothing happened
This is not metaphysics; it is more about the market structure becoming more 'fragile' at the end of the year. You can understand the end-of-year BTC as: the road is narrower, there are fewer cars, but the brakes are more urgent.
Let’s clarify with 'a picture + three forces': why is it easier to experience volatility at the end of the year, and how ordinary people can reduce risk without predicting the direction.
A chart: Three forces of year-end volatility (core logic)
Year-end BTC is more volatile
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Liquidity becomes thinner derivatives are more sensitive funds are rebalanced/emotions are amplified
(Road narrows) (Hedging becomes urgent) (Those who should settle are settling)
Just remember: price volatility = trading power × market depth.
The end of the year is often "the trading power hasn't changed or even becomes more extreme, but the depth has become shallower," thus volatility is amplified.
1) Liquidity becomes thinner: the same order is more likely to trigger a "needle" at the end of the year
1.1 Why does depth become shallower at the end of the year?
Holiday effect: market-making teams, quantitative teams reduce risk exposure, some strategies pause or lower positions
Thin trading: active traders decrease, order book orders become sparser
Risk control tightens: exchanges and market makers are more inclined to withdraw orders during volatility to avoid being "eaten through"
The result is: thinner order book, larger spreads, and greater slippage.
You may not feel it strongly in mainstream trading pairs, but it will be very obvious in non-mainstream trading pairs/cold stablecoin pairs/small coins.
1.2 What typical phenomena can this cause?
Needle insertion: market orders/forced liquidation orders sweep through the order book, causing the transaction price to temporarily deviate from the "real price"
False breakout: just broke out and then fell back, because there are not enough orders above the breakout range, insufficient support
More exaggerated at night: the transition of Asian/European and American trading sessions, low activity periods are more prone to needles
2) Derivatives are more sensitive: the end of the year is the season of "hedging drive"
The volatility at the end of the year is often not about "news," but rather about position structure: futures, perpetuals, and options are driving short-term volatility.
2.1 Leverage and liquidation: why is it easier to chain at the end of the year?
At the end of the year, many people like to "take a gamble," leverage rises
Once volatility amplifies, stop-loss and forced liquidation will instantly amplify selling/buying pressure
What you see as a "sudden acceleration" is often: trigger → chain reaction → pullback/continue to trample
2.2 Options expiration and "key price competition"
At the end of the month, quarter, or year, concentrated options expirations often occur. Near expiration:
Market makers hedge more frequently (delta hedging)
Certain strike prices are prone to form "price magnets" (back and forth pulling)
Once it leaves the magnet zone, it may experience a "sudden acceleration" (change in hedging direction)
You will see the most typical picture:
Pulling back and forth at a certain integer (like 90k, 100k), stabbing up and pulling back.
3) Fund rebalancing and emotional amplification: the end of the year is "settlement season"
3.1 What are institutions/big players doing?
The end of the year is a typical time for "account management":
Lock in profits: after a year of increase, some funds will take profits
Reduce volatility: hedge funds/asset management reduce risk exposure before the festival
Rebalance: position proportions deviate from targets (e.g., BTC rises too much), will sell back to target proportions
This type of trading is often not "bearish" but rather about "managing net value."
But it will bring one consequence: upward movements are harder to go smoothly in one go, and pullbacks are more likely to appear suddenly.
3.2 Emotion and information vacuum: small news is more easily amplified
Information density decreases during holidays, but social media sentiment is stronger. Thus:
Gossip, screenshots, and rumors are more likely to trigger short-term chasing and killing
Traders are more likely to operate based on "feelings"
Short-term volatility is more frequent, especially near key price levels
4) Break down "wind" into 3 scenarios you can understand
Scenario A: False breakout → rapid pullback
Break through key price levels
Insufficient support + market making withdrawal
Return to the range, wash out the chasing buyers
Scenario B: Needle insertion → stop loss sweep/forced liquidation → immediate repair
Thin order book gets swept through
Trigger stop-loss/forced liquidation
Arbitrage/support pulls the price back (appears as if "nothing happened")
Scenario C: Chain acceleration → emerging trend
Breakthrough triggers hedging/liquidation chain
Volatility becomes trend-following "chasing orders"
Only then can it possibly turn from "wind" into "trend"
5) Most important: How ordinary people cope (can win without predicting direction)
5.1 Trading action checklist
Use market orders less during holidays/nights, prioritize limit orders
Reduce leverage by one level: year-end volatility is an amplifier, and leverage is the amplifier of the amplifier
Use Mark/Index for stop-loss trigger price (if the platform supports), don't use Last
Avoid heavy positions in obscure trading pairs: mainstream pairs are more stable, small coins are more likely to be volatile
Enter and exit in batches: don't use "one shot," let random needle insertions not hurt you
Focus on 3 signals: depth/spread (whether liquidity has deteriorated)
Funding rates and open interest (whether leverage is overheated)
Transactions and pullbacks near key price levels (whether in the "magnet zone")
5.2 The most practical conclusion in one sentence
The BTC at the end of the year is not more "difficult to predict," but rather more "easily amplified by structure."
Instead of guessing the direction, it’s better to adjust positions, leverage, and triggering methods.
The essence of year-end volatility is the superposition of three things: liquidity becoming thinner, derivatives being more sensitive, and funds settling and rebalancing.
You don’t need to guess whether it will rise or fall today, you just need to know: it is more likely to give you false moves and needle insertions.
Do risk control right, and you can turn "wind" into your advantage, rather than harm.
