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Holiday options expiry raises short-term Bitcoin volatility

Written by Brie CarterPublished dez. 25 2025Last Updated dez. 25 2025

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Bitcoin entered the Christmas trading week locked in a narrow range as reduced participation across crypto markets led to sharply thinner liquidity.

Market observers said holiday absences among traders have amplified the potential for sudden but short-lived price swings.

Gold pushed to new record highs during the same period, underscoring a divergence between traditional safe havens and digital assets.

Data showed a clear pullback in leverage as traders closed positions rather than rotating into new risk.

Bitcoin perpetual futures open interest dropped by roughly $3 billion overnight, signalling a broad reduction in speculative exposure.

Ether also saw a significant decline, with open interest falling by around $2 billion during the same period.

Analysts said lower leverage reduces systemic risk but leaves markets more vulnerable to exaggerated moves due to thin order books.

Seasonal patterns have historically played a role in late-December crypto volatility.

According to QCP’s 23 December market note, Bitcoin has frequently posted swings of between five and seven per cent during the Christmas period.

These holiday moves have often been driven by derivatives flows rather than shifts in long-term fundamentals.

Attention is now focused on an unusually large year-end options expiry scheduled for this week.

Around 300,000 Bitcoin options, representing approximately $23.7 billion in notional value, are set to expire.

In addition, roughly 446,000 options contracts linked to BlackRock’s spot Bitcoin exchange-traded fund are also due to settle.

More than half of Deribit’s total Bitcoin options open interest is concentrated in the Boxing Day expiry.

Key strike levels are clustered around $85,000 and $100,000, reflecting uncertainty over near-term price direction.

Market data placed the so-called “max pain” level close to $95,000, where option losses are minimised for sellers.

Open interest in $85,000 put options has declined in recent sessions, suggesting reduced downside hedging.

Meanwhile, positioning in $100,000 call options has remained relatively stable.

Analysts said this pattern points to cautious optimism for a late-year bounce, albeit with limited conviction.

Broader market stress indicators have also shown signs of easing.

Bitcoin risk reversals, which measure the balance between bullish and bearish option demand, have become less negative than earlier in the month.

Despite downside protection still commanding a premium, sentiment appears to be gradually normalising.

Traders cautioned that holiday-driven volatility often fades once normal liquidity returns.

Historical data shows that December price moves frequently mean-revert in January.

Analysts said only a decisive breakout above or below current ranges would be likely to reset market expectations.

In the absence of such a move, Bitcoin is expected to remain range-bound through the end of the year.

Market participants said January’s return of institutional activity will be critical in determining the next sustained trend.

At the time of reporting, Bitcoin price was $87,750.91.