Why Dec 26th Is A Do Or Die for Bitcoin Price Ahead Of Record Options Expiry?

As Christmas winds down, the Bitcoin price dipped 0.74% to around $86,750. Market participants saw limited activity due to the holiday season, with overall crypto market capitalization falling by 0.8% to just under $3 trillion. 

Bitcoin price ranged briefly to $90,000 and then retreated again, a trend observed all through December as rallies rose and fell.

Other cryptocurrencies, including Ethereum, XRP, and Solana, also consolidated under poor liquidity.

Ether fell below $3,000, and BNB and Solana went to $850 and $125, respectively. Volatility at the end of the year is looming, forcing traders to be cautious.

Record Options Expiry Looms Over Bitcoin Market

Bitcoin is heading into a potentially volatile end to the year, with a record-breaking $23.8 billion in options set to expire on Friday, December 26. This expiry is on Deribit and constitutes over half of all the open interests, and almost 300,000 contracts are up to be settled.

The options construct has strike concentrations of close to $85,000 and $100,000, which form a tension point of the Bitcoin price.

The put-to-call ratio is 0.38, which is bullish bias, and the point of maximum pain is approximately in the range of $96,000, which seems to be a short-term price magnet.

Thin holiday liquidity and the manner in which traders roll or close positions in Bitcoin, can have a drastic effect on its price.

A 3-billion reduction in BTC open interest and a 2-billion fall in ETFs, which QCP Capital has also warned the market of, indicate a cooling off of leveraged exposure.

The post-expiry flows determine the extent to which the spot prices remain pegged or sharply decline, and December 26 is a pivotal day in crypto markets.

$90K or Bust? Bitcoin Price Risks Retest of $84K Zone

According to a crypto analyst on X-post, Bitcoin is currently confined in a non-trending price range. His analyst says that the Long-term BTC projection should recover the $90,000 point to indicate the restart of upside momentum.

Until then, a retest of the support zone of $84,000-85,000 is likely to occur again.

The analysis of the charts indicates that Bitcoin has incessantly failed to cross the resistance of $88,000 and $90,000. 

This range has been a supply zone, and it has repelled some bullish attempts. Meanwhile, the level of $84,000-$85,000 provides solid support.

A breakdown of this zone would put the way open to more downward movement to the levels of the $82,000 or $80,200. 

Bitcoin Price Analysis

The BTC price is trading near $86,800 as bearish momentum builds within a tightening range, ahead of the holiday lull.

Bitcoin is stuck between the $85,000 support and $90,000 resistance. There have been several efforts to regain the use of the zone between $88,000 $90,000. 

Price action indicates that the market is consolidating under the $88,000 level. With the sellers coming in to bid the market each time there is a small correction.

The MACD 4-hour bears a negative crossover. The MACD line is lower than the signal line, and this indicates downward momentum. The histogram is red, indicating building pressure by sellers. The RSI has fallen to 40, which is below the neutral 50 mark.