Bitcoin dipped below the US$88,000 mark on Monday as traders positioned ahead of a major derivatives event, with US$28.5 billion worth of options set to expire on crypto derivatives exchange Deribit. The move reflects heightened caution across the market as participants assess potential volatility tied to one of the largest options expiries of the year.
The world’s largest cryptocurrency was trading around US$87,800 late on December 22, down from recent highs, as short-term selling pressure intensified. Market analysts say the pullback is less about a shift in long-term sentiment and more about tactical positioning by traders seeking to hedge risk or lock in profits ahead of the expiry.
Deribit dominates the global crypto options market, and large expiries often act as inflection points for price action. The scale of this week’s expiry has raised expectations of sharp intraday moves, particularly if prices gravitate toward so-called “max pain” levels, where the largest number of options contracts expire worthless.
Data from derivatives markets show a heavy concentration of open interest around key strike prices between US$85,000 and US$90,000. This range could act as a magnet for price action in the final hours before settlement, as market makers rebalance positions and traders unwind or roll over contracts into future maturities.
Despite the short-term weakness, broader market sentiment toward Bitcoin remains relatively constructive. Institutional participation continues to underpin demand, supported by sustained inflows into regulated crypto investment products and expectations that U.S. monetary policy could become more accommodative in 2026. However, analysts caution that near-term volatility is likely to remain elevated as derivatives-driven flows dominate trading.
The options expiry comes amid a wider consolidation across the crypto market, with several major tokens also trading lower. Traders are closely watching whether Bitcoin can hold above key technical support levels following the settlement, which could determine whether the recent pullback deepens or gives way to a renewed push higher into year-end.
Bitcoin sinks as crypto rout deepens on fresh regulatory jitters
