Bitcoin price trades sideways ahead of $1.85B options expiry

Bitcoin price is hovering in a narrow range as traders stay cautious ahead of a large options expiry, with both spot and derivatives data pointing to lack of a clear directional bet.

At press time, Bitcoin was trading at $88,326, up 0.6% over the past 24 hours. Over the last week, the price has moved between $86,979 and $90,064, with neither buyers nor sellers able to take control. On a longer view, Bitcoin ended the year 6.7% lower and remains about 30% below its October peak of $126,080.

Market activity has slowed. Spot trading volume over the past 24 hours dropped to $21 billion, down more than 40% from the previous day. Derivatives data tells a similar story. 

Trading volume in futures fell 39% to $32 billion, while open interest edged up 0.6% to $55 billion. This mix suggests many traders are sitting on existing positions rather than opening fresh ones, a common setup ahead of a major expiry.

Options expiry weighs on near-term conviction

Bitcoin (BTC) options with a notional value of $1.85 billion are set to expire at 8:00 a.m. UTC on Jan. 2, based on data from Deribit. The put-to-call ratio stands at 0.48, and the max pain level is near $88,000. Ethereum (ETH) options worth $390 million will also expire, with a max pain price of $2,950.

With options, traders can reserve the right, without being forced to do so, to buy or sell Bitcoin at a particular price prior to a given date. Call options make money when prices rise, while put options profit when prices fall. As expiration draws near, many traders modify or sell their positions, which may affect prices in the short term.

As of now, the data suggests a somewhat optimistic outlook, but not enough to propel Bitcoin well above the $88,000 mark. The price continues to hover around significant strike levels, open interest is stable, and trading activity is declining.

That kind of setup usually leads to choppy, sideways action until the options expire. Once they do, the market may loosen up as those positions are unwound.

On-chain data points to a late-cycle transition

A Jan. 2 analysis from CryptoQuant contributor Yonsei_dent adds to the cautious tone. Bitcoin’s Supply in Profit, which tracks how much of the circulating supply is held at a gain, is currently at 68.85%. As a result, the market is positioned between clear bull and bear markets.

In previous cycles, readings below 55% indicated deeper bear phases, while readings above 80% typically corresponded with strong bull runs. Bitcoin slipped below 80% in October and has been trending lower since. That kind of slow grind, rather than a sharp drop, often appears late in a cycle. 

How long the metric stays near current levels matters. A pushback above 75–80% would strengthen the case for fresh upside, while a prolonged stall around 70% has historically increased the risk of a wider downturn. 

Bitcoin price technical analysis

Bitcoin’s structure is still sideways to bearish. The general trend shows lower highs and lower lows, even though recent price action has shifted into tight consolidation rather than a sharp continuation lower.

Bollinger Band narrowing is a sign of reduced volatility. The price is holding in the lower half of the bands and is still under pressure close to the middle band. This setup usually comes before a larger move, but it doesn’t tell which way it will break.

The relative strength index is near 48, close to neutral. Momentum has stabilized after an oversold stretch, but buyers have yet to show strength.

Support has formed in the $86,000 to $87,500 area, where price has bounced several times. Resistance sits between $89,500 and $91,000. A firm daily close above that zone would hint at recovery. A loss of support would put the downtrend back in focus.