Bitcoin Options Expiry Coming: Will Crypto Market Move This Christmas?

Bitcoin price went through a complete shift in its performance in the last few days. More importantly, it stayed in an entire week downtrend for the first time since Trump’s win in the US election. However, amid the recovery and the crypto market witnessing the Christmas Santa rally, the investors are enthusiastic, but at the same time, the upcoming Bitcoin options expiry is concerning.

How Would $14B Bitcoin Options Expiry Affect BTC Price?

Bitcoin price is attempting to overcome its recent dip, which pushed the value to $92K, despite hitting the ATH at $108.2k just three days before that. At present, Bitcoin is trading at $93.9k after bearing a 13% drop over the week. However, this might face another volatility pressure, with one of the biggest Bitcoin options expiring events on December 27, 2024.

According to the Deribit reports, around $14B worth of Bitcoin options expire on the exchange, which is 44% of the total BTC options OI and the largest expiry in the exchange’s history. Additionally, 50% of Ethereum options will expire, worth $3.77 billion. Such high expiration could cause crypto market volatility and heavy price swings.

The max pain price for the Bitcoin options expiry is $84,000, which means that most contract options will expire worthless, leading to a massive loss for the options buyers. More importantly, this indicates a significant drop from the current levels as the BTC price will move towards $84k. Even further fluctuations could require traders to be extra careful for the next few days, as few analysts are concerned about a temporary drop to $70k.

However, this volatility often subsides, with the rising buying pressure, as the whale attempts to buy the dip, eventually helping with recovery.  Overall, this will introduce significant fluctuation in the crypto market.

Crypto Market Volatility To Take Over Christmas Santa Rally

Although the Bitcoin options expiry-induced volatility will last short, many other factors will bring further fluctuations. Based on a few analysts’ predictions, the volatility will be lesser during Christmas but could increase past that, impacting the Christmas Santa rally. As Arthur Hayes’s price prediction says, Bitcoin price would crash during Donald Trump’s inauguration. Eventually, this could lead to increased crypto market volatility.

However, this is nothing compared to the  Kobeissi Letter reports, which hint at a possible BTC price drop to $20k on the basis of Bitcoin’s tendency to follow the trends of global money supply. The analysts have found a correlation between Bitcoin charts and the global monetary supply but with a 10-week lag. This correlation gets further clear, with the Bitcoin price hitting ATH weeks after the global money supply peaked in October at $108.5. Based on that, BTC might drop to $20K as GMS dropped to months low of $104.4 trillion.

Meanwhile, altcoins will boom in the current Bitcoin options expiry and further January consolidation, supporting the crypto market recovery. Although altcoins will face a significant downtrend, the recovery will be quick, as the BTC price drop will push investors to altcoins, fueling the altcoin season.

How To Tackle The Upcoming Bitcoin Volatility?

The crypto market is packed with cryptos that offer heavy returns. In 2024, Bitcoin surpassed the rest after hitting the $108.2k mark, but the status is under threat as the Bitcoin options expiry will challenge its position. With $14B BTC expiring this December 27, the investors will witness significant fluctuations, impacting their trades. However, analysts believes this expiry generated volatility would recover soon, leaving the space for further growth. However, more concerns are awaiting, especially with Trump’s inauguration in January 2025, as Arthur Hayes and others predict a 20-25% Bitcoin price correction.