so apparently december 26th is gonna be absolute chaos for bitcoin and most people have no idea why
$23.6 billion in bitcoin options plus another $3.8 billion in ethereum options are expiring on friday. that's Boxing Day for people outside the US but for crypto traders it's basically the hunger games
this is the BIGGEST single-day options expiry in bitcoin's entire history
like not even close. we're talking about a $23.6 billion gamma flush that represents nearly 50% of the entire market structure
let me break down why this matters and why your bitcoin bags might move violently in the next 72 hours
What Even IS an Options Expiry (and why should you care)
okay quick crash course because not everyone trades options:
an option is basically a bet on where bitcoin's price will be by a certain date. you can buy a "call" (betting price goes UP) or a "put" (betting price goes DOWN)
when these options expire they either pay out or they don't. if you bet bitcoin would hit $100k by friday and it's only at $88k? your option expires worthless. you lose your premium (the money you paid for the bet)
but here's the IMPORTANT part most people miss:
the companies selling these options (market makers, big institutions) have to hedge their bets. when millions of these contracts are about to expire they start buying and selling massive amounts of actual bitcoin to balance their books
this expiry involves over 50% of Deribit's total open interest (Deribit is the biggest crypto options exchange). that means more than HALF of all the options bets currently open are settling on the same day
The Numbers Are Actually Insane
roughly 268,000 option contracts are set to expire friday
and here's where it gets interesting - the put-to-call ratio is 0.38, which means for every 100 call options there are only 38 puts
translation: way more people bet on bitcoin going UP than going down
the biggest clusters of bets:
- $85,000 put was the most popular downside bet
- most calls are stacked between $100,000 to $116,000
right now bitcoin is sitting around $88k (it hit $92k last week then dropped). so most of those high strike calls? completely out of the money. dead in the water.
Max Pain - The Price Gravity Effect
there's this concept called "max pain" and it's wild
the max pain level sits near $96,000 - that's the price where the MOST option holders lose money when contracts expire
why does this matter? because market makers who sold these options have an incentive to push price toward that level. not through manipulation (that's illegal) but through their hedging activity
some estimates suggest the critical level is near $88,000 though which is... exactly where we are right now
so there's this gravitational pull happening. bitcoin wants to drift toward these key strikes as friday approaches
The Liquidity Problem (this is the scary part)
normally a $23.6 billion expiry would be manageable. but we're hitting this during:
- christmas week (low trading volume)
- end of year (people closing positions, taking profits)
- liquidity already dried up with STH P/L ratio at just 0.07x
think of it like this: imagine trying to make a U-turn with a massive truck on a narrow street. now imagine doing that same U-turn on a sheet of ice
that's what trading bitcoin is gonna feel like as we approach friday
when liquidity is thin, big orders cause MASSIVE price swings. and we're about to see some very big orders as institutions unwind their hedges
What Usually Happens During Big Expiries?
i looked back at previous major expiries and honestly the pattern isn't super clear
sometimes bitcoin pumps right after. sometimes it dumps. sometimes nothing happens
BUT - and this is key - in the last three "Triple Witching" events (when crypto options and traditional market options expire together) bitcoin and the broader crypto market saw massive pullbacks afterward
we just had Triple Witching day in traditional markets last friday (december 19). $7.1 trillion in stock/bond/commodity options expired then, and now we're getting hit with this crypto expiry just a week later
so we've got:
- record bitcoin options expiry (this friday)
- massive ethereum options expiry (this friday)
- we just recovered from that historic traditional market expiry last week
- all during the lowest liquidity week of the year
what could possibly go wrong lol
The Bull vs Bear Case
bulls are saying:
- call options outnumber puts almost 3-to-1, showing bullish bias
- once this expiry clears, bitcoin could surge toward $118,000 as hedging pressures dissipate
- ETF inflows and institutional buying will take over post-expiry
bears are pointing out:
- $1.4 billion sitting in $85,000 put options creating downward pressure
- implied volatility at 45% and -5% skew signals priced-in weakness into early 2026
- bitcoin already dropped from $92k to $88k this week, momentum looks shaky
My Read On This Whole Situation
honestly? i think we're in for some wild price action thursday night into friday
not because i'm some genius trader (i'm definitely not) but because the math just points to chaos when you combine:
- record-breaking expiry size
- ultra-low liquidity
- concentrated strikes around current price
- cross-market correlation with traditional finance
gamma is concentrated between roughly $86,000 and $110,000 which means that's the range where hedging activity is most intense
if bitcoin breaks cleanly above $95k or drops below $85k before friday, things could accelerate FAST in either direction. but if we just chop around in this $86k-$92k range? probably less dramatic
one thing i'm watching: some traders are rolling their december put options into january expiries
that tells me people aren't convinced the downside risk is over just because this expiry passes
So What Should Regular People Do?
(not financial advice obviously but here's how i'm thinking about it)
if you're holding long term: this is probably just noise. zoom out to the weekly or monthly chart and chill
if you're trading actively: maybe don't open huge positions wednesday night or thursday. wait for the dust to settle post-expiry. the premiums on options are jacked up right now anyway because implied volatility is elevated
if you're looking to buy: there MIGHT be a dip opportunity if we get sell pressure into friday. or we might rip higher once the expiry clears. nobody actually knows which is why this is fun (and terrifying)
i will say this though - bitcoin's structural demand is robust with institutions cementing its role in modern portfolios
so even if we see short term volatility around the expiry, the longer term setup still looks solid. we've got ETF inflows, regulatory clarity improving, halving effects still playing out
After Friday, Then What?
after the dec 26 expiry the shape of the curve will matter as much as the level of spot
basically once this massive expiry clears we'll get to see what the "real" supply and demand looks like without all this derivative noise clouding the picture
if institutions kept accumulating through ETFs while options were pinning price down? we could see a pretty aggressive move up
if the selling pressure from miners (who are getting crushed right now as we covered in that other article) combines with weak macro? we might retest $80k
january is historically a strong month for bitcoin though. and we'll have gotten through this expiry, through tax loss harvesting season, through end of year shenanigans
the setup for Q1 2026 could actually be really interesting
Final Thoughts
$23.6 billion expiring in one day is genuinely unprecedented
most of the "smart money" i follow on twitter is either sitting on their hands until saturday or hedging both directions because the risk/reward on directional bets right now is sketchy
market's panic has subsided and the looming expiry is likely to be much more orderly than last year according to deribit themselves
but idk man. bitcoin has a way of doing exactly what would hurt the most people. and right now that means either:
- crushing all those call buyers who bet on $100k+
- or ripping higher and leaving bears who shorted at $90k underwater
are you doing anything special to prepare for this? trimming positions, adding hedges, just ignoring it completely? curious what your strategy is because this feels like one of those moments that could go either way fast
also if bitcoin somehow ends friday at exactly $88,000 (near max pain) i'm gonna lose my mind because that would be the most bitcoin thing ever
