Why is BTC more prone to "wild swings" at the end of the year? A chart explaining the three forces (and how you should respond)

At the end of each year, you will see these scenes more frequently:

No big news, but BTC can suddenly spike 1%~3% Repeated “false breakouts/false breakdowns” near key integer levels More frequent “秒拉秒砸” (quick spikes and drops) during nights and weekends A quick spike clears stop-losses, and the price returns as if nothing happened

This is not mysticism; it’s more about market structures becoming more “fragile” at year-end. You can think of BTC at year-end as: narrower roads, fewer cars, but sharper brakes.

Below, with “one chart + three forces,” I’ll explain why year-end is more prone to fluctuations, and how ordinary traders can reduce risk without predicting the direction.

One chart: The three forces behind year-end volatility (core logic)

  Year-end BTC more volatile
        ▲
        │

┌────────────┼────────────┐ │ │ │ Liquidity thins Derivatives more sensitive Rebalancing/Emotion amplification (Road narrows) (Hedging more urgent) (Those settling accounts are settling)

Remember: Price volatility = Trading force × Market depth. Year-end often sees “trading force unchanged or even more extreme, but depth shallow,” thus amplifying volatility.

1. Liquidity thinning: Same orders, but easier to cause “spikes” at year-end

1.1 Why does depth become shallower at year-end?

Holiday effect: Market-making teams and quant teams reduce risk exposure; some strategies pause or lower positions Low trading activity: Fewer active traders, order books are sparser Tighter risk controls: Exchanges and market makers tend to withdraw orders during volatility to avoid “being eaten”

Result: Order books become thinner, spreads wider, slippage larger. You might not notice much on mainstream trading pairs, but it’s very obvious on less popular pairs/stablecoins/altcoins.

1.2 What typical phenomena does this cause?

Spike: Market orders/liquidations sweep through the order book, causing prices to temporarily deviate from “true price” False breakout: Price briefly breaks through then falls back, due to insufficient orders above breakout zone More exaggerated at night: Asian/European/American trading sessions switch, low activity periods more prone to spikes

2. Derivatives more sensitive: Year-end is a “hedging-driven” season

Year-end fluctuations are often not driven by “news,” but by position structures: futures, perpetual swaps, options all drive short-term volatility.

2.1 Leverage and liquidations: Why is chain reaction more likely at year-end?

Many traders like to “go all-in” at year-end, increasing leverage When volatility amplifies, stop-losses and liquidations quickly intensify selling/buying pressure What you see as “sudden acceleration” is often: trigger → chain reaction → rebound or further sell-off

2.2 Options expiry and “key price level battles”

At month-end, quarter-end, year-end, markets often see concentrated options expiries. As expiry approaches:

Market makers hedge more frequently (delta hedging) Certain strike prices tend to act like “price magnets” (pulling prices back and forth) Once away from the magnet zone, “sudden acceleration” can occur (hedge direction change)

The most typical scene: Prices oscillate around an integer level (like 90k, 100k), then spike up and pull back.

3. Rebalancing and emotion amplification: Year-end is “settlement season”

3.1 What are institutions/large holders doing?

Year-end is a typical “book management” period:

Lock in profits: After a year of gains, some funds take profits Reduce volatility: Hedge funds/asset managers lower risk exposure before holidays Rebalance: When positions deviate from targets (e.g., BTC has risen too much), they sell to return to target ratios

These trades are often not “bearish,” but “managing net value.” But it results in: harder to rally in one smooth move, and retracements can happen suddenly.

3.2 Sentiment and information vacuum: Small news gets amplified

During holidays, information density drops, but social media sentiment intensifies. So:

Rumors, screenshots, and gossip are more likely to trigger short-term chasing and panic selling Traders rely more on “feelings” Short-term volatility becomes more frequent, especially near key levels

4. Break down “fluctuations” into 3 understandable scenarios

Scenario A: False breakout → quick pullback

Breaks above key level Insufficient support + market maker withdrawals Returns to range, shaking out chasing traders

Scenario B: Spike → stop-loss/liquidation sweep → immediate recovery

Thin order book gets swept Stops triggered/liquidations hit Arbitrage/support orders pull price back (looks like “nothing happened”)

Scenario C: Chain reaction acceleration → trend emergence

Breakout triggers hedging/liquidation chain Volatility turns into trend-following “chasing orders” This is when “fluctuations” can turn into “trends”

5. Most importantly: How can ordinary traders respond (win without predicting direction)

5.1 Trading action checklist

Avoid market orders during holidays/night; prefer limit orders Lower leverage by one level: Year-end volatility is an amplifier; leverage is the amplifier of the amplifier Use Mark/Index prices for stop-loss triggers (if platform supports), avoid Last prices Avoid heavy positions on obscure trading pairs: mainstream pairs are more stable, altcoins more prone to spikes Trade in batches: don’t go all-in at once; small spikes won’t hurt you Monitor 3 signals: liquidity/depth/spread (is liquidity deteriorating?) Funding rates and open interest (is leverage overheating?) Trades and pullbacks near key levels (are they in “magnet zones”?)

5.2 The most practical conclusion in one sentence

Year-end BTC is not harder to “predict,” but easier for its structure to amplify. Instead of guessing the direction, adjust your positions, leverage, and trigger methods accordingly.

The core of year-end fluctuations is the stacking of three factors: liquidity thinning, derivatives sensitivity, and rebalancing. You don’t need to guess whether it will go up or down today; just know it’s more likely to give you fake moves and spikes. By managing risk properly, you can turn “fluctuations” into your advantage, not your harm.