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Today, cryptocurrency prices remained mostly stable as traders adopted a cautious stance ahead of a historic options expiry later this week.
Summary
- Bitcoin is stabilizing around $88,000 as the market cap prepares for its next movement.
- With $222 million in liquidations and $129 billion in open interest, leverage is increasing despite heightened fear.
- The $28 billion BTC and ETH options expiry on December 26 is keeping price action restrained, with anticipated volatility after this date.
The total cryptocurrency market capitalization decreased by 0.8% to $3.07 trillion. Bitcoin was trading at $88,088 at the time of writing, down 0.7% in the last 24 hours. Ethereum fell 1% to $2,987, Chainlink dipped 0.6% to $12.49, and Sui decreased 0.4% to $1.45. Other smaller altcoins like Zcash, Monero, and Ethena experienced drops of over 5%.
Market sentiment continued to show weakness, with the Crypto Fear & Greed Index falling one point to 24, indicating a state of extreme fear.
According to CoinGlass data, pressure is building beneath the surface. Liquidations over the past 24 hours surged 11% to $222 million, while total crypto open interest increased by 1.1% to $129 billion. Despite the lackluster price action, the average market relative strength index stands at 47, reflecting neutral momentum.
Options expiry constrains price movement
Traders are gearing up for a significant options expiry, with around $27 billion to $28.5 billion in Bitcoin and Ethereum contracts set to expire on Deribit on December 26. Bitcoin options comprise approximately $23.6 billion, while Ethereum options account for about $3.8 billion, marking a record expiry for the exchange.
Options provide traders the right to buy or sell at specified prices. When many contracts accumulate near crucial strike levels, market makers often adjust their exposure through spot market transactions.
This hedging might keep prices stable until the options expire. While underlying volatility has been increasing, price movements have remained relatively tight due to significant positioning around key Bitcoin strike prices. Many traders are postponing new trades, opting to observe market behavior post-expiry.
Limited liquidity influences short-term perspective
Another layer of caution is observed during the holiday season. December typically sees a drop in trading volume as traders reduce their exposure and funds finalize their accounts. Bitcoin has fallen roughly 28–30% from its October high of over $125,000, and the market is still adjusting to this decline.
Wider macroeconomic conditions have also impacted risk appetite. The Bank of Japan’s rate increase to 0.75% has tightened global liquidity, pressuring risk assets such as cryptocurrencies. As investors move towards safer holdings, both gold and silver have reached record highs, while the U.S. equity market has declined due to concerns about the valuations of AI-related tech stocks.
In the near term, Bitcoin seems to be in a state of consolidation. As long as options positioning remains substantial, significant price movements are unlikely. A clear breakout might occur after December 26, when the pressure from hedging diminishes. Until then, price action suggests erratic trading, with downside risks limited near recent lows, unless liquidation pressures intensify.
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