Bitcoin Approaches Potential Breakout From $85,000-$90,000 Range Ahead of Major Options Expiry
Bitcoin has been trading within a tight range of $85,000 to $90,000 for most of December, supported by hedging activity stemming from significant options exposure. Price movements near the lower bound of $85,000 and upper bound of $90,000 have prompted buying and selling pressure driven by gamma and delta hedging by options dealers.
A major event looms as $27 billion of open interest on the Deribit exchange is set to expire on December 26, with a pronounced call option bias. The open interest is particularly skewed toward upside strike prices between $100,000 and $116,000, with the maximum pain strike observed at $96,000, reinforcing expectations of an upside bias.
The market anticipates that after the options expiry, Bitcoin is likely to resolve upward toward the mid-$90,000s rather than sustain a break below $85,000. However, as these hedging dynamics subside following the expiry, the stabilizing influence of gamma and delta hedging will diminish, potentially increasing volatility if the market moves.
More than half of the Deribit open interest is expected to roll off at expiry, with a put-call ratio near 0.38 indicating dominance of call options. Meanwhile, Bitcoin’s implied volatility, as measured by the Volmex, remains near a one-month low around 45, suggesting subdued near-term risk.
At the time of report, Bitcoin was priced around $86,785.54.
