The options indicate that the Bitcoin (BTC) enters the final weeks of 2025 under great pressure, with around $23 billion in contracts are set to expire next Friday, threatening to increase already high volatility..
This amount represents more than half of all open interest on Deribit, the largest Bitcoin options platform. The looming buildup shows traders are pricing in continued downside risk in a market that has become even more dangerous.
The total market value of Bitcoin fluctuated by more than $130 billion in just an hour during US trading on Wednesday, triggering a cascade of liquidations of long and short positions. The broader crypto market is hovering around the $3 trillion level.
“Markets continue to fall heading into the new year, with prices on the edge of a knife,” said Nick Forster, founder of digital asset trading platform Derive.xyz.
Bitcoin increased by 3%, to US$88,328, this Friday (19), remaining slightly positive for the week. The world’s largest cryptocurrency is down about 30% since hitting an all-time high of more than $126,000 in early October.. Other tokens, including ether (ETH), dogecoin (DOGE) And solana (SUN)were trading up about 4% early Friday morning in New York.
“Bitcoin positioning remains resolutely bearish. The 30-day volatility is once again approaching 45%, while the bias is around -5%. Longer-term skewness also remains anchored at around -5%, indicating that traders are pricing in continued downside risk throughout the first and second quarters as continued selling pressure from previously inactive portfolios weighs on spot prices,” Forster said, referring to a measure of the relative cost of upside potential versus downside protection, known as skewness.
Positioning around the December 26 expiration reflects this split. Calls are concentrated at the $100,000 and $120,000 strike prices, indicating residual optimism about a possible year-end relief bounce.. Nonetheless, sellers dominate the near-term scenario, with a strong accumulation of put options at US$85,000 – a level which, according to digital asset trading firm STS Digital, concentrates around US$1.4 billion in open interest and can act as a gravitational “magnet” until the options expiration date.
Post-expiration, traders expect a repositioning around two catalysts: protection ahead of MSCI’s Jan. 15 decision that could exclude digital asset treasury companies whose crypto holdings exceed 50% of total assets from its indexes, and the resumption of call sales flows. “Together, these flows should increase downward volatility while limiting upside potential,” said Maxime Seiler, managing director of STS Digital.
The feeling remains fragile. Bitcoin is heading for its worst quarter since the second quarter of 2022, when the collapses of TerraUSD and Three Arrows Capital shook the sector. BRN’s Timothy Misir said Bitcoin’s failure to regain key levels leaves the market “stuck in a fragile holding pattern.”
Bitcoin’s apparent demand growth entered a slowing period in early October and is now below that trend, according to analysts at research firm CryptoQuant. “Bitcoin demand growth has slowed decisively, signaling a transition into a bear market,” the analysts wrote in a note published Friday.
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