The Bitcoin price is currently fluctuating within a narrow range as traders exercise caution ahead of a significant options expiry, with both spot and derivatives data indicating a lack of decisive direction.
Summary
- Bitcoin has maintained the $87,000–$89,000 range as $1.85 billion in options approach expiry.
- Derivatives volume decreased by 39%, while open interest remained unchanged, reflecting hesitation rather than proactive bets.
- Technical indicators show compression near support, with a more significant move likely after expiry.
As of the latest update, Bitcoin was trading at $88,326, registering a 0.6% increase over the last 24 hours. In the past week, the price has fluctuated between $86,979 and $90,064, with neither buyers nor sellers gaining an upper hand. Long-term, Bitcoin concluded the year down 6.7% and is still approximately 30% below its October peak of $126,080.
Market activity appears to have slowed. The spot trading volume over the past day has fallen to $21 billion, down more than 40% from the previous day. Similar trends are evident in derivatives data.
Futures trading volume has decreased by 39% to $32 billion, while open interest has risen by 0.6% to $55 billion. This combination suggests that many traders are holding onto existing positions rather than initiating new ones, a typical occurrence ahead of a major expiry.
Options expiry affects near-term conviction
Bitcoin (BTC) options with a total notional value of $1.85 billion are set to expire at 8:00 a.m. UTC on Jan. 2, according to Deribit data. The put-to-call ratio is at 0.48, and the max pain point is around $88,000. Additionally, Ethereum (ETH) options worth $390 million will expire, with a max pain level of $2,950.
Options allow traders to secure the right, but not the obligation, to buy or sell Bitcoin at a predetermined price before a specified date. Call options benefit from rising prices, while put options profit from falling prices. As expiration approaches, many traders adjust or liquidate their positions, which may temporarily impact prices.
Currently, the data indicates a moderately optimistic outlook, but insufficient to drive Bitcoin significantly above the $88,000 level. Prices continue to linger around critical strike zones, open interest remains stable, and trading activity is on the decline.
This type of scenario typically leads to erratic, sideways price movement until the options expire. Following expiration, the market may become more fluid as those positions are unwound.
On-chain data suggests a late-cycle transition
A Jan. 2 analysis by CryptoQuant contributor Yonsei_dent reinforces a cautious outlook. Bitcoin’s Supply in Profit, which tracks how much of the circulating supply is held at a profit, currently stands at 68.85%. Consequently, the market finds itself between clear bull and bear trends.
Historically, readings below 55% signal deeper bear markets, while values above 80% are associated with strong bull runs. Bitcoin fell below 80% in October and has continued a downward trend since then. This slow decline, rather than a sharp fall, is often observed late in a market cycle.
The duration for which this metric remains at current levels is significant. A rebound above 75–80% would bolster the case for new upward movement, whereas a protracted stall around 70% has historically heightened the risk of a broader downturn.
Bitcoin price technical analysis
Bitcoin’s overall structure still appears sideways to bearish. The prevailing trend shows lower highs and lower lows, although recent price action has transitioned into tight consolidation rather than a pronounced downward continuation.
The narrowing of Bollinger Bands indicates reduced volatility. The price is positioned in the lower half of the bands and remains under pressure near the mid-band. This configuration often precedes a more substantial movement but does not indicate the direction of the breakout.
The relative strength index is about 48, which is close to neutral. Momentum has stabilized following an oversold period, but buyers have yet to demonstrate strong engagement.
Support has developed within the $86,000 to $87,500 range, where the price has bounced multiple times. Resistance lies between $89,500 and $91,000. A decisive daily close above that range would suggest a potential recovery. Conversely, losing support would bring the downtrend back into focus.
