Options expiration hits record high, Bitcoin stays below $90,000

Source: PortaldoBitcoin Original Title: Record Options Expiry Dominates Market and Keeps Bitcoin Below US$ 90,000 Original Link: Bitcoin once again falls below US$ 90,000, with low market liquidity—a typical feature during holidays—while precious metal prices rise, and market focus shifts to record-breaking options expiries as the main concern for the end-of-year cryptocurrency market.

On Monday, Bitcoin briefly touched US$ 90,000 during trading but lost momentum, falling back to around US$ 87,400 the next day, reflecting a pattern seen in recent weeks—rebound attempts are met with immediate resistance.

BRN research director Timothy Misir said market sentiment remains cautious. He pointed out that the rally lacks sustainability, while the decline, though mild, is persistent.

Institutional fund flows also reinforce this defensive stance. The spot Bitcoin ETF traded in the US recorded net outflows of US$ 142 million on December 22. In contrast, Ethereum-related products saw inflows of US$ 84.6 million, while Solana and XRP ETFs attracted US$ 7.47 million and US$ 43.89 million, respectively.

Record-breaking Options Expiry

Market focus is on the options expiry on Friday (26th), known as the largest expiry event of the year-end. About 300,000 Bitcoin options contracts, with a notional value of approximately US$ 23.7 billion, are set to expire, accounting for more than half of Deribit platform’s open interest in Bitcoin.

According to Jean-David Pequignot, head of trading at the platform, the combined expiry value of Bitcoin and Ethereum options reaches US$ 28.5 billion, nearly double that of the same period last year. Despite the large scale, he said the market remains relatively orderly, with the Bitcoin implied volatility index DVOL holding around 45.

Major positions are concentrated at strike prices of US$ 85,000 and US$ 100,000. Pequignot believes this structure indicates that investors remain somewhat optimistic about a year-end rebound but with limited confidence. The average funding rate increased from 0.04% to 0.09%, indicating increased leverage long positions despite limited liquidity.

QCP Capital observed that many traders prefer to close positions rather than roll over. The firm reported that open interest in Bitcoin perpetual contracts dropped by about US$ 3 billion within a day, and Ethereum’s open interest decreased by about US$ 2 billion. QCP believes that shrinking liquidity increases the risk of significant price volatility.

Both Misir and QCP noted that typical volatility during the Christmas week usually diminishes in January, when market participation picks up again. This suggests that current volatility is more mechanical than driven by structural changes.

While the cryptocurrency market seeks direction, gold is moving inversely, reaching new highs near US$ 4,450. Misir believes this divergence reflects a return to macroeconomic protectionism at year-end, driven by global political uncertainties.

President Trump confirmed he will announce a Federal Reserve chair candidate in early January. Although not seen as a direct trigger for the market, this reinforces a defensive stance among investors until the situation becomes clearer.