Options expiration at record scale dominates the market; Bitcoin remains below $90,000

Source: PortaldoBitcoin Original Title: Record-breaking options expiration dominates market and keeps Bitcoin below US$ 90,000 Original Link: Bitcoin drops below US$ 90,000 again, with the market in a typical holiday liquidity shortage environment, precious metals rising, and expectations of record-scale options expiration becoming the main focus of the year-end cryptocurrency market.

After briefly touching US$ 90,000 on Monday, BTC lost momentum and fell back to around US$ 87,400 the next day, maintaining the pattern observed in recent weeks — rebound attempts encountering almost immediate resistance.

Timothy Misir, Head of Research at BRN, said market sentiment remains cautious. He pointed out that the rally lacks sustained support, while the decline, though mild, shows signs of persistence.

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

Record-breaking options expiration

The market’s focus is on the options expiration scheduled for Friday (26th), a date known as Boxing Day in many countries, and the largest on record. About 300,000 Bitcoin options contracts, with a notional value of approximately $23.7 billion, are set to expire, representing over half of the open interest on the Deribit platform.

According to Jean-David Pequignot, Business Director at a DEX platform, the combined expiration scale for Bitcoin and Ethereum options reached $28.5 billion, nearly double what was observed at the same time last year. Despite the large scale, he said the market remains relatively orderly, with the Bitcoin implied volatility index DVOL hovering around 45.

Major positions are concentrated at strike prices of $85,000 and $100,000. Pequignot believes this structure indicates a slight optimism about a possible year-end rally, although investor confidence appears limited. The average funding rate also increased from 0.04% to 0.09%, indicating that leveraged long positions are increasing, despite liquidity being more constrained.

A leading exchange observed that many traders prefer to close positions rather than roll over. Reports indicate that open interest in Bitcoin perpetual contracts decreased by about $3 billion in one day, while Ethereum’s decline approached $2 billion. The institution noted that liquidity contraction increases the risk of sharp price swings, whether upward or downward.

Both Misir and a major exchange emphasized that typical volatility during the Christmas week often loses momentum in January, when market participation tends to rise again. This suggests that current volatility is more mechanical than driven by structural changes.

As the cryptocurrency market seeks direction, gold moves in the opposite direction, soaring to new record highs near US$ 4,450. Misir believes this divergence reflects a return of macroeconomic protection demand at year-end, driven by global political uncertainties.

The US President confirmed that the Federal Reserve leadership decision will be announced in early January. While not seen as a direct market trigger, this topic helps reinforce investors’ defensive positions until more clarity emerges.