$23.6B Bitcoin Options Expiry Sets Up a Holiday Volatility Shock
Bitcoin heads into a holiday week inflection point as major derivatives positions roll off. Meanwhile, ETF outflows and tight price ranges keep traders focused on near term liquidity. Options positions cluster near key strikes ahead of Dec. 26 expiration More than $23.6 billion in Bitcoin options are set to expire Friday, Dec. 26, according to an analysis shared on X by NoLimitGains, as traders track how dealer hedging could shift once contracts roll off. Options give traders the right, not the obligation, to buy or sell Bitcoin at a set “strike” price by a set date. Calls generally profit if Bitcoin finishes above a strike, while puts generally profit if it finishes below. As expiration approaches, market makers and dealers often hedge their exposure in spot or futures markets, and those hedges can change quickly as price moves around large strike concentrations. Bitcoin Options Open Interest by Strike Price. Source: NoLimitGains (X) The shared chart showed total open interest near 268,695 contracts, with call open interest around 195,079 and put open interest around 73,617, implying a put to call ratio near 0.38. The graphic also listed a notional value of about $23.63 billion and marked a “max pain” level near $96,000, a commonly used reference point that estimates where option holders would lose the most value at expiry. NoLimitGains said the Dec. 26 event would be the largest Bitcoin options expiry to date, while arguing that holiday week conditions can amplify price swings because thinner liquidity can make each large order move the market more than usual. The post added that traders often see choppy price action into expiration, then a clearer directional move after hedges unwind and the open interest concentration disappears. Bitcoin ETF outflows deepen as past reversals draw attention Meanwhile, US spot Bitcoin exchange traded fund flows have dropped to one of their weakest levels of the year, based on a chart shared on X by GordonGekko that tracks a 30 day moving average of net flows alongside Bitcoin’s price. BTC US Spot ETF Net Flows 30 Day Moving Average. Source: GordonGekko (X) The chart shows sustained negative ETF flows through late November and December, with red bars expanding as price moved lower toward the mid to high $80,000 range. These outflows reflect more capital leaving spot Bitcoin ETFs than entering, signaling reduced institutional demand through regulated products over the past month. Historically, similar drawdowns in ETF flows have coincided with periods of market stress rather than immediate trend reversals. However, the chart highlights that the last time ETF outflows reached comparable lows earlier in the year, Bitcoin later staged a sharp recovery as selling pressure eased and flows stabilized. The relationship between ETF flows and price remains indirect. ETF outflows do not automatically trigger price declines, but they often align with broader risk off behavior, reduced liquidity, and hedging activity in derivatives markets. Once outflows slow or turn neutral, price volatility can increase as marginal selling pressure fades. As of late December, the data shows ETF flows still negative, while price remains under pressure. Whether the current drawdown marks a continuation of weakness or a setup for a reversal depends on how flows evolve after the holiday period, when market participation typically returns to normal levels. BTC holds a narrow range after the drop, while traders track $90,647 and $83,986 Bitcoin traded near $87,106 on the BTCUSD chart shared by rbswingtrader on Dec. 23, after a steep selloff pushed price into a tight consolidation range. The chart shows Bitcoin sliding from the $108,519 area before stabilizing below a cluster of resistance levels. Price repeatedly failed under $90,647, while the next marked resistance sits around $91,932 and $92,202. Above that zone, the chart highlights a Fibonacci level near $92,718 and mid range levels around $95,758, with the 0.5 retracement labeled near $96,836 and $96,690. BTCUSD Price Range and Key Levels. Source: rbswingtrader (X) On the downside, the chart frames support around $86,169, then $83,986. A deeper support band appears near $80,427, while a lower target sits near $74,185. The candles during December show sharp swings inside the range, which signals active two way trading rather than a clean trend. The volume panel highlights a shaded “accumulation volume” area during the base building phase, while the RSI panel sits near the high 20s. The RSI also shows a rising trend line from the late November low, which indicates improving momentum even as price stays compressed. In his post, rbswingtrader said “smart money” is buying in the current area and suggested the market could briefly push to a new low before reversing. The chart itself shows the key question as whether Bitcoin reclaims the $90,647 to $92,202 zone or breaks below $83,986 and forces another leg down.