Erik Solberg

Date: January 8, 2026
Subject: BTC Strategic Outlook – Week 2
Classification: Confidential / Hedge Fund Strategy.
Executive Summary
Following the aggressive price discovery seen in late 2025, Bitcoin (BTC) has entered a sophisticated Distribution Phase. While retail sentiment remains buoyed by the $100,000 narrative, our internal metrics—specifically institutional positioning and derivatives architecture—suggest a tactical retracement is imminent. We are currently observing a divergence between rising Open Interest and stagnant price action, a classic precursor to a deleveraging event.
I. Institutional Positioning: The COT Breakdown
The latest Commitments of Traders (COT) data reveals a cooling of conviction among Asset Managers. While they maintain a net-long bias, we have observed a 4.2% reduction in exposure near the $94,000 handle.
In contrast, Leveraged Funds have increased their net-short positions to record levels. This is not necessarily a directional bet against Bitcoin, but a massive Basis Trade expansion—arbitraging the spot ETFs against futures premiums. This institutional "selling" creates a formidable ceiling; until these short positions are rolled or covered, $94,000 remains a structural barrier.
II. Derivatives Architecture: Liquidity Hunts and Max Pain
The "plumbing" of the market suggests a buildup of fragile leverage:
The Liquidity Cluster: Our Heatmap analysis identifies a massive concentration of "Long Liquidations" resting between $88,500 and $89,200. In a low-volatility environment, the market typically gravitates toward these pockets of liquidity to "flush" the system before any meaningful continuation.
Options Gamma & Max Pain: The January 16th expiry has a Max Pain point of $91,000. With the Put/Call ratio sitting at 0.65, retail is heavily skewed toward upside calls. Market makers, to remain delta-neutral, are incentivized to keep the price pinned near $91,000 or lower to ensure these options expire worthless.
Perpetual Funding: While funding rates are not yet "hyper-bullish" (neutral at +0.01%), the rising Open Interest ($34.8B) on flat price action indicates that "Limit Sellers" are absorbing every "Market Buy" order.
III. Stablecoin Dynamics: The Exhaustion of "Dry Powder"
From a treasury perspective, USDT Dominance (USDT.D) has reached an oversold floor on the Daily RSI. This confirms that the majority of deployable capital has already been converted into risk assets.
The Inversion: We are now seeing the initial stages of a dominance bounce. As capital rotates out of volatile Alts and back into Stables, we expect a momentary vacuum in buy-side support for $BTC .
IV. Tactical Verdict & Strategy
The current setup is a Bull Trap until proven otherwise. We view any spike into the $93,000 - $93,800 range as a "Liquidity Exit" rather than a breakout.
Key Technical Pillars:
Primary Resistance: $94,500 (Institutional Sell Wall).
Immediate Support: $89,800 (Options Max Pain).
Target Re-entry Zone: $87,500 - $89,000 (Liquidation Hunt Zone).
Strategic Recommendation:
We are maintaining a Neutral-to-Bearish stance for the next 72–96 hours. We advise against chasing breakouts in this high-OI environment. Our preference is to wait for the inevitable "Long Flush" toward the $89k region to reload spot positions.
Watch Item: Monitor the CLARITY Act review on Jan 15; regulatory clarity is the only fundamental catalyst capable of overstepping the current technical distribution.
#CPIWatch #USJobsData #WriteToEarnUpgrade

​A mysterious bond trader (or institution) has placed a massive wager on the direction of US interest rates just weeks before the Federal Reserve's January 28 policy meeting.
​1. The Scale of the Trade
​Volume: 200,000 contracts for the January 2026 Fed Funds futures.​The Record: This shattered the previous record of 84,000 contracts set in late 2025. To put this in perspective, the average daily volume for these contracts is usually around 495,000—meaning this single trade represented nearly half of a typical day's entire market activity.​The Risk (DV01): The trade carries a risk of approximately $8.3 million per basis point (0.01%) move. If interest rate expectations shift by just 0.10%, the value of this position would swing by over $80 million.
​2. What is the Trader Betting On?
​Market reports indicate this was a "sell" trade. In the world of Fed Funds futures, selling (shorting) the contract is a bet that interest rates will stay higher than currently expected or that planned rate cuts will be canceled.
​The Goal: The trader likely believes that the Federal Reserve will be more "hawkish" (keep rates high) due to strong economic data or sticky inflation.​The Timing: The trade was placed just days before the release of the crucial US Non-Farm Payrolls (NFP) report. If the jobs report is stronger than expected, it gives the Fed a reason not to cut rates, which would make this trade highly profitable.
​3. Why Does This Matter?
​When a single player moves this much money, it creates a "signal" in the market. It suggests that a major institutional player (like a massive hedge fund or a global bank) has high confidence that the market is currently "mispricing" what the Fed will do in late January.
Key takeaway: This isn't just a trade; it's a massive statement of conviction that US interest rates are not going to drop as fast as people think.

#FedInterestRate #FedRateCutWatch #USJobsData #CPIWatch

Most people calling themselves “futures traders” aren’t traders at all — they’re just drawing lines, guessing, and getting liquidated.
If you want to survive in perps, these fundamentals aren’t "OPTIONAL"— they’re the bare "MINIMUM".
1. Macro Is the Real Boss — Crypto Just Reacts
Markets move because global liquidity expands or contracts.And that liquidity is shaped by:
US Federal Reserve (rates, QT/QE, balance sheet)
US Treasury (issuance, TGA flows, bills vs bonds)
Bond market (real yields, curve shape)
DXY (risk-on/risk-off gauge)
Crypto is NOT independent.
Ignore macro → misread every move.
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2. Session Timings (Winter – No DST)
Crypto trades 24/7, but liquidity still follows global session flow. If you don’t know these, you misread volatility.
Sessions (UTC – December):
Tokyo: 00:00–09:00
London: 08:00–17:00
New York (Forex): 13:00–22:00
Power overlaps:
London + Tokyo: 08:00–09:00
London + NY: 13:00–17:00 (where most traps, reversals, and real moves occur)
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3. Price Action Isn’t Enough — Markets Move Through Auction
Candles don’t move because your “support line” looks perfect.
They move because the market is an auction, driven by:
Value migration,Volume/Market Profile,Imbalance fills,Inventory pressure,Trapped traders,Liquidity collection zones
If you can’t read the auction, you can’t read futures.
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4. BTC & ETH Are Driven by Options Flow — Not Indicators
The biggest hidden driver of crypto volatility is the options market. Currently, Deribit holds the largest BTC options open interest of any exchange.
If you don’t understand:
delta
gamma exposure (pins vs expansion)
volatility crush
dealer hedging
vanna/charm flows
…then you don’t understand why:
ranges hold
breakouts die
fakeouts happen
volatility disappears
sudden spikes appear
None of this is random — it’s options-driven liquidity mechanics.
Crypto Options Expiry (Current Pattern):
Most BTC/ETH expiries on major exchanges settle around 08:00 UTC.
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5. Even If You Know All This — Crypto Still Has Manipulation
Futures/perps are contracts, not the underlying asset.Whoever owns the underlying asset owns the playground.
It’s their field, their rules, their liquidity — you’re just a participant.
The only assets with relatively cleaner behavior due to deep liquidity and large market cap are:
BTC, and to a strong extent ETH, XRP, SOL, and BNB.
Everything else is a liquidation playground disguised as a trading opportunity.
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Bottom Line
If you don’t understand:
macro
session rhythm
auction mechanics
options flow
liquidity structure
…you’re not trading — you’re just sketching lines and praying for luck.
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Final Warning
Stay away from influencers, course sellers, and signal providers.
They’re not here to help you — they’re here to squeeze commissions, referral bonuses, and perks by dragging you into the market. They don’t care about your portfolio and your financial struggle.
If you want to survive, learn the system — not the people who profit from your losses.
#FutureTarding #Leverage #Crypto
$ETH $BTC

The Federal Reserve delivered a 25 bps rate cut, bringing the federal funds target range to 3.50–3.75%.
Markets barely reacted — because this move was entirely priced in well before the announcement. A larger 50 bps cut would have triggered a short-term risk rally, but the Fed stayed aligned with expectations, so there was no surprise premium.
Institutional traders understood this weeks in advance. More importantly, they understand exactly how retail traders think — the emotional triggers, the obsession with candles, and the predictable over-reaction to headlines. Market makers build liquidity traps around that behavior.
Why the Market Didn’t Explode After the Cut?
Everyone in professional finance already knew:
The Fed would cut 25 bps
Labor-market softening would be the justification
The tone would remain cautious
So when the announcement matched the forecast, the market simply kinda absorbed it.
How Market Makers Manipulate the Illusion of “Momentum”?
Exchanges and market makers always need fresh liquidity — new participants, new orders, new fuel.
Since genuine volume dries up during certain hours and seasons, they create movement through microstructural tactics, especially around:
Major news releases
Session opens (Asia, London, New York)
Low-liquidity pockets
Here’s what really happens:
1. They widen spreads
When volatility risk is high or liquidity is thin, market makers widen their bid/ask spreads to avoid getting hit on both sides.
Retail traders misinterpret this as “momentum” — they see fast candles, breakouts, or sudden wicks, when in reality the move is simply a temporarily thin order book, not real buying or selling pressure.
2. They sweep liquidity in small controlled bursts
This creates the illusion of trend, tricking inexperienced traders into chasing a fake breakout.
Institutions then fade the move right back.
3. Session timing matters — most crypto traders especially those paricipate in Futures(perp) don’t even know the basics
Many retail participants in crypto don’t track:
Asian FX flows
European interest rate positioning
London–NY overlap liquidity
How currency markets influence equities
How equities sentiment bleeds into crypto
So they take purely technical signals at face value, unaware that the underlying liquidity conditions are changing hour by hour, minute by minute.
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What the Fed Actually Communicated
The Fed didn’t cut rates to “stimulate a booming economy.”
They cut because the labor market is weakening and the downside risk to employment has grown. Higher unemployment risk means the Fed needs to make borrowing cheaper for businesses, so companies don’t start firing aggressively.
At the same time, inflation is still above target, so the Fed is not willing to launch an aggressive easing cycle.
The message was:
> “We’re easing — but carefully. The economy is okay, inflation is still elevated, and we’re not in a hurry to cut deeply.”
This is the opposite of a “pivot.”
It’s risk management, not full-blown stimulus.
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Practical Advice for Crypto Traders(Especially MENA & South East Asian Countries) — During Holiday Season:
From mid-December onward, global markets enter a liquidity vacuum:
US and European institutional desks reduce risk
Funds close their books
Real money leaves the market temporarily
Crypto often shows fake rallies in this environment — sharp upside moves created by thin books, not genuine demand. These rallies exist to lure reactive retail traders like you into providing liquidity before the market snaps back.
Expect:
Choppy sideways action
A mild bearish lean
Potential sharp downside wicks (liquidity grabs)
Bitcoin probing areas like 83k → 81.75k within the next 10 days if liquidity remains thin
This is not the environment to anchor decisions purely on chart patterns or social-media hype.
Professional futures traders listen to Powell’s language, not just the rate number.
The forward guidance is what prices the future — and futures trading is literally about anticipating tomorrow, not reacting to today’s candle.
And One More Thing — Bank of Japan Next Week
While everyone is staring at the Fed, the Bank of Japan is preparing for a rate hike decision next week.
This matters because:
A BOJ hike strengthens the yen
Yen strength forces global funds to rebalance
Rebalancing affects US yields and dollar liquidity
And dollar liquidity influences crypto flows
If BOJ tightens, global risk assets — including crypto — could feel further short-term pressure.
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Final View
The Fed cut was expected → muted market response.
Tone was cautious → no big bullish impulse.
Liquidity remains thin in December → expect traps, wicks, and choppy structure.
Bitcoin likely stays in a constrained, slightly bearish range.
The real macro catalyst to watch now is BOJ next week, not the Fed.

#CPIWatch #BTC #CryptoRally