Critical December 26 for Bitcoin: Navigating Record Options Expiry
Bitcoin Price Fluctuations Amid Holiday Season
As the holiday season concludes, Bitcoin's price saw a slight decline of 0.74%, settling around $86,750. The market experienced subdued activity due to the festive period, leading to an overall crypto market cap drop of 0.8%, falling just below $3 trillion. Bitcoin briefly surged to $90,000 before pulling back, a pattern consistent throughout December with fluctuating rallies.
Other major cryptocurrencies like Ethereum, XRP, and Solana also showed consolidation amidst low liquidity. Ether dropped below $3,000, while BNB and Solana declined to $850 and $125, respectively. Traders remain cautious as year-end volatility looms.
Anticipating Record Options Expiry
Bitcoin approaches a potentially volatile close to the year with an unprecedented $23.8 billion in options set to expire on December 26. This expiry, occurring on Deribit, represents over half of all open interests, with nearly 300,000 contracts to be settled. Strike concentrations near $85,000 and $100,000 create tension points for Bitcoin's price.
The put-to-call ratio stands at 0.38, indicating a bullish bias, with a maximum pain point around $96,000 acting as a potential short-term price magnet. Thin holiday liquidity and trader movements can significantly influence Bitcoin's price trajectory.
A reduction of $3 billion in BTC open interest and a $2 billion decline in ETFs, as warned by QCP Capital, suggest a cooling off of leveraged exposure. Post-expiry market flows will determine if spot prices stabilize or experience a sharp decline, making December 26 a pivotal day in the crypto markets.
Price Analysis: Bitcoin's Critical Support and Resistance Levels
According to a crypto analyst, Bitcoin is currently within a non-trending price range. The long-term projection requires a recovery to $90,000 to renew upward momentum. Without this, a retest of the $84,000-$85,000 support zone is likely. Chart analysis shows consistent failure to surpass the $88,000-$90,000 resistance, with this range acting as a supply zone repelling bullish efforts. Conversely, the $84,000-$85,000 zone provides strong support. A breakdown here could lead to further declines towards $82,000 or $80,200.
Technical Indicators and Market Sentiment
Currently trading near $86,800, Bitcoin exhibits bearish momentum within a tightening range. It remains trapped between $85,000 support and $90,000 resistance, with attempts to reclaim the $88,000-$90,000 zone. Price action suggests consolidation below $88,000, with sellers entering on minor corrections.
The 4-hour MACD indicates a negative crossover, with the MACD line below the signal line, signaling downward momentum. The histogram is red, reflecting increasing seller pressure, while the RSI has dropped to 40, below the neutral 50 mark.