Michael van de Poppe, an Amsterdam-based analyst who is closely followed by crypto traders, warned his followers over the weekend that Bitcoin could see a “classic sweep” at the beginning of the week, a rapid drop in liquidity that wipes out weak hands, before returning to an uptrend.
“I wouldn't be surprised if we see a typical big sell-off in Bitcoin on Monday, after which it will return to an uptrend,” he said, adding that the coming days are likely to be “significantly volatile” as the Bank of Japan prepares policy decisions and a heavy macro calendar enters the last full trading week before the holidays.
Traders monitoring the price movement woke up to find Bitcoin trading in the low $90,000s, a range that has become something of a battleground after a volatile December so far. As of Sunday, Bitcoin was hovering around $90,000 to $95,000, according to live market feeds, and several data providers reported minimal net activity but lower-than-usual trading volumes, Van de Poppe said, adding that precise market conditions typically precede fast directional moves.
Market structure and open derivative positions add an even sharper edge to short-term movements. The exchange's analysis flags about $23.8 billion in Bitcoin options expiring this month, and historically, delta hedging and forced liquidations cascade through the order book, potentially amplifying price volatility with concentrated expirations. In layman's terms, when a large portion of options expire, market makers and traders may need to actively buy and sell the underlying Bitcoin to balance their risks, potentially magnifying the impact of whichever direction the price chooses.
Traders brace for year-end volatility
The combination of these technical risks and derivative risks creates a macro context with unexpectedly large impacts. Major media outlets and market calendars have pointed to the Bank of Japan as a focus this week, with Reuters reporting that BOJ watchers are widely expecting further interest rate action as the BOJ resumes its rate hike cycle. This decision, combined with the hectic schedule of U.S. statistical releases ranging from jobs to inflation data being pushed back into the final weeks of the year, creates the kind of cross-asset events that risk traders dislike, especially when liquidity is already low.
On the charts, many traders clearly observe the same mechanism that Van de Poppe described. The 4-hour chart, which is widely circulated among traders, marks a line around $91,900 as an important short-term level. Above that is a resistance band around $100,700, which will likely need to be cleared for a clean bullish resumption.
The same chart annotates the possibility of a decline to gain liquidity before a sustained rally, a scenario consistent with the term “classic sweep.” With volumes subdued over the past 48 hours, the path of least resistance may be a fast, sharp move rather than a slow move. What this means for investors depends on their horizon and risk tolerance.
Short-term traders may position for a two-step move. The idea is to wipe out liquidity and remove stops below the recent consolidation, then rebound to trap sellers and push the price towards higher resistance. Longer-term holders will be watching to see if key support bands hold through the market's broader reaction to central bank signals. As some institutional investors are cautioning their clients, sudden volatility at the end of the year can create opportunities, but it can also lead to sharp drawdowns, cautioning them to adjust positions wisely if day-to-day fluctuations are a concern.
If the kind of big wave van de Poppe predicts happens on Monday, the immediate question will be how quickly the market can absorb the move and whether option expirations and central bank headlines will push the rally into a sustainable uptrend. The tightening could be particularly sharp if the Bank of Japan's measures turn out to be unexpectedly positive or if U.S. data changes the Fed's view.
Conversely, a correction and passage through major support could trigger heavier selling before bargain hunters intervene again. Either way, traders should expect noise and pay attention to volume. This signal, many say, will determine whether the post-sweep move is a correctional surge or the beginning of something bigger.
For now, Van de Poppe's view represents a well-known view among the technically focused trader community. So volatility comes first and direction comes second. In a market where option expirations, central bank decisions and thin liquidity at the end of the year all coincide, many will be watching this forecast closely to see how this week unfolds.
