Crypto markets exhibited little movement today, with traders adopting a cautious stance as they anticipate a record options expiry later this week. The total cryptocurrency market capitalization experienced a slight decline of 0.8%, settling at $3.07 trillion. At the time of writing, Bitcoin was valued at $88,088, reflecting a 0.7% decrease in the past 24 hours. Similarly, Ethereum fell by 1% to $2,987, while Chainlink dropped 0.6% to $12.49 and Sui decreased 0.4% to $1.45. Various smaller altcoins, including Zcash, Monero, and Ethena, experienced declines exceeding 5%.
The prevailing market sentiment remains fragile, as indicated by the Crypto Fear & Greed Index, which fell one point to 24, placing the market firmly in the extreme fear category. Data from CoinGlass revealed that liquidations over the past 24 hours surged by 11% to $222 million, while total open interest in the crypto market rose by 1.1% to $129 billion. Despite the lackluster price movements, the average market relative strength index stood at 47, suggesting a neutral momentum.
Traders are gearing up for a significant options expiry, with an estimated $27 billion to $28.5 billion in Bitcoin and Ethereum contracts set to expire on Deribit on December 26. This includes approximately $23.6 billion in Bitcoin options and $3.8 billion in Ethereum options, marking the largest expiry in the exchange”s history. Options provide traders with the right to buy or sell at predetermined prices, and when numerous contracts cluster around key strike levels, market makers often engage in hedging through spot market transactions. This hedging activity may keep prices locked within a certain range until the expiry.
As underlying volatility continues to build, price movements have remained relatively stable due to significant positioning around major Bitcoin strike prices. Many traders are opting to hold off on new trades, waiting to gauge market behavior post-expiry. The holiday season typically brings about lower trading volumes, as traders reduce their exposure and funds close their accounts. Following a notable 28–30% decline from its peak above $125,000 in October, Bitcoin is still in the process of absorbing this downturn.
The broader macroeconomic environment has also impacted risk appetites, with the Bank of Japan”s recent rate hike to 0.75% tightening global liquidity and placing pressure on risk assets, including cryptocurrencies. As investors pivot towards safer assets, gold and silver have reached all-time highs, while concerns about valuations in AI-related tech stocks have led to declines in the U.S. equity markets.
In the short term, Bitcoin appears to be in a consolidation phase. While heavy options positioning persists, significant price movements remain unlikely. A definitive shift may occur after December 26, once the hedging pressure subsides. Until that point, price action is likely to remain choppy, with downside risk contained near recent lows unless liquidation pressures intensify.
