Bitcoin is trading at $86,800, having slipped below $87,000 a few hours ago. It continues its slow decline following the previous day’s almost 2% drop.
An earlier prediction noted that the apex coin’s $89k support is essential, stating that losing it would send the asset closer to $85k. The current price suggests that the asset is edging closer to retesting the next barrier since losing $89,000.
The crypto market has been relatively quiet with no intense price action. Nonetheless, the asset experienced notable volatility on Monday, testing $90k but losing momentum afterward. It retraced a little but ended the day with no significant price change.
Most investors are currently out of the market as the holidays approach. However, BTC is not trading where many earlier predicted it would be. The speculation going into the third quarter was a surge to $150, but the asset is trading more than 40% below that mark.
Some traders are gearing up for further price consolidation, anticipating the coin will remain rangebound for the rest of the year. Factors like reduced activity in spots and perpetual markets fuel the conviction.
However, one other market promises late drama into Christmas and the next 48 hours. Options expiries will start on Dec 25 and continue into the 28th.
Option Expiration on Christmas
Options data reveals several expirations approaching from Dec 25 through Dec 28. The effect of these expirations remains unclear. However, they may trigger significant volatility during this period. This could mean Bitcoin may see late-year drama amid the holidays.
The first expiration will be on Christmas and could deliver a “Santa rally.” Current open interest is 1,527 worth over $132 million. The max pain price is $88,000, and the current BTC price is around $86,800.
The next 24 hours may see the asset edge closer to the pain price as bulls try to push it above it at expiration. They get extra help because market makers will also hedge prices closer to $88k, making the bulk of the options contracts worthless.
Bitcoin could end the day above $88,000 if spot buying resumes. Over the last 24 hours, bullish option traders have been edging. However, the number of buyers exceeds the calls on a larger scale. It remains to be seen how this would affect BTC in the next 24 hours.
Nonetheless, after the expiration, the asset may become volatile as the market gears up for another massive expiration the next day.
The Biggest Bitcoin Options Expiration
While the exact price at which the apex coin will end on the 25th remains to be seen, volatility is almost assured. The “lid” imposed by market makers’ hedging will be lifted, allowing spot demand and supply to dictate the following price action.
Nonetheless, there’s an increased chance prices will surge. Bitcoin will see another options expiration on the 26th. It would be the largest termination this December. Currently, there are 267,281 open interest contracts worth over $23 billion.
Interestingly, the max pain point is $95k. The bulls will have an added reason to cause a significant price rally on Christmas Day. Market makers will aid the surge as they fight to send prices to the pain level, making them worthless.
The apex coin is bound to experience increased volatility in the hours leading up to the expiration. At its current price, surging to the pain level will see the asset gain a whopping 7%. However, such a hike is not assured.
Nonetheless, the bulls have an added incentive to make it happen. Data from Deribit shows calls that dwarf the put buyer by almost 100%.
Prices may plummet after the expiration as traders take profits. Although there are other option terminations on the 27th and 28th, they are significantly less and would barely cause any strong price reactions.
Bitcoin Whales Prepare for Uptrend
Recent data shows that investors are gearing up for the impending surge. Darkfost noted the evident decline in Bitcoin inflow into Binance from whales in December. They declined by more than half, dropping from $7.88 billion to $3.86 billion in just a few weeks into the month.
The latest action from this large holder indicates reduced selling pressure from this cohort. Nonetheless, it is worth noting that the inflow is not down to zero, which means a few whales who decide may still cause price swings at any given time.
However, the reduced inflow is positive for Bitcoin in the short term and may signal a price recovery, which coincides with the options expirations.
While the spot market shows signs of an impending surge, derivatives, such as futures, remain bearish. Open interest dropped as the market participation tanked due to the holiday. Nonetheless, the key level over the last two weeks remains intact, as the apex coin has yet to experience any significant price swings.
The image above shows the liquidation heat map, which depicts a large cluster of liquidations at $90,700. It previously extended to $90,500, but Monday’s hike cut into the cluster. The bears will continue defending the $90.7k barrier, as failure to do so will result in short positions worth almost $1 billion getting rekt.
1-Day Chart Gives Green Light
Indicators on the 1-day chart are currently bullish. For example, the moving average convergence divergence had a positive crossover a few days ago. However, since the interception, BTC has not surged. The upshot may happen within the next 24 hours.
The bollinger bands align with this reading as Bitcoin continues to trade below the middle band. It may break above the SMA and edge closer to the upper band at $92,972. Options data suggest a flip may happen.
