Derivatives expire at $13.3 billion in focus: what awaits Bitcoin next week

Bitcoin has been below $90,000 for the third consecutive day, trading with minimal fluctuations. However, the cryptocurrency market is preparing for several significant events that could change the situation.

The most critical event is expected on December 26, when the expiration of Bitcoin options worth over $13.3 billion occurs on Deribit. This is the most direct test for the BTC price, as more than half of the current open interest is concentrated around this date. The “maximum pain” strike is in the range of $100,000-$102,000 — at this level, most contracts will expire without profit.

What impact will the Christmas Witching have?

Prior to that, on December 19, there will be a quarterly options expiration on the US stock market — simultaneous expiration of futures and options on indices and stocks. Derek Lim from crypto market maker Caladan explains the mechanism of influence: “The most likely channel of transmission is through movements in the stock market, which alter risk appetite, and then this is reflected in cryptocurrencies as high-beta assets.”

Historical examples show mixed results. The March witching caused a significant drop in crypto, the June event led to nearly 2% declines in BTC and Ethereum with subsequent monthly consolidation, and the September event had a much more limited impact. This indicates that the direct correlation between these events and crypto is ambiguous.

Macroeconomic winds in opposition

Tym San, senior researcher at HashKey Group, emphasizes the complexity of the situation. “Global markets are facing several overlapping variables this week,” he says. These include US employment data and the Bank of Japan’s monetary policy meeting.

Growing attention to the potential tightening of the Japanese bank’s policy is particularly important. Such tightening could lead to unwinding of carry trades, resulting in capital outflows from high-beta assets, including Bitcoin. At the same time, concerns about capital expenditure rates in the AI sector further constrain growth potential amid limited liquidity.

Traders’ defensive stance

Technical indicators suggest a cautious stance remains. The put-call ratio around 1.10 indicates a protective position among market participants, and inconsistent ETF flows and reduced liquidity during the holidays add additional pressure.

At the same time, users remain optimistic about Bitcoin’s long-term prospects in forecasts. The probability that BTC will rise to $100,000 instead of falling to $69,000 is estimated at 68%.

Year-end portfolio rebalancing

Institutional investors are currently in the phase of annual rebalancing. During this process, some capital may decide to reduce risk and lock in annual profits, which could create temporary selling pressure or increase volatility of risk assets, including cryptocurrencies.

Conclusion: a day of volatile trading is expected, with the highest volatility window in the late US session, but the biggest test for Bitcoin will come with the $13.3 billion options expiry on December 26, when the real game around the $100,000-$102,000 level begins.