As the year comes to an end, the Bitcoin derivatives market is approaching a crucial expiration phase. Experts highlight that on December 26th, Bitcoin options valued at around $23.8 billion are set to expire, potentially triggering significant liquidations and a reassessment of risk across the market.
Blockchain analyst Murphy pointed out that this expiration includes both quarterly and annual contracts along with various structured financial products. This event is expected to cause widespread position closures and adjustments in risk exposure within the Bitcoin derivatives space as the year concludes.
Murphy further explained that while price movements may remain relatively stable leading up to the expiration date, volatility and uncertainty are likely to surge immediately afterward.
Data from options markets reveals a substantial concentration of open positions near current Bitcoin spot prices. Specifically, there are 14,674 BTC in put options with an $85,000 strike price and 18,116 BTC in call options struck at $100,000. Such large volumes typically belong not to retail traders but rather institutional players such as ETF hedge funds, corporate treasuries holding Bitcoin reserves, prominent family offices, and long-term institutional investors.
The demand for put options at $85K reflects strong hedging activity against potential downward moves. On the other hand, although call option volume at $100K might appear bullish on surface level analysis, experts caution it does not necessarily indicate an impending bull run. Instead, it suggests that major holders prefer steady cash flows over chasing gains beyond this threshold due to risk considerations.
This dynamic between puts providing downside protection and calls capping upside potential effectively narrows Bitcoin’s trading range ahead of expiry. Analysts describe this corridor—from roughly $85K up to $100K—as creating structural constraints on price action until December 26th emerges—characterized by implicit resistance near the top boundary; passive support along the bottom; with fluctuating prices within these limits.
*Please note: This content does not constitute financial advice or recommendations for investment decisions.