$23 Billion Bitcoin Options Expiry Set to Increase Market Volatility

Bitcoin is nearing a significant market event as $23 billion worth of options are set to expire on December 26, marking the largest expiration in its history. This could lead to heightened volatility.

Impact of Options Expiration

Options expiration removes substantial risk from dealer books, potentially driving volatility.
This year-end expiration is notably larger than previous years: $6 billion in 2021, $2.4 billion in 2022, $11 billion in 2023, and $19.8 billion in 2024.
The market landscape shift indicates increased influence from institutional investors over retail traders.
Low liquidity conditions might amplify price movements due to reduced trading volume during the holiday season.

Key Price Ranges and Market Sentiment

Significant gamma exposure exists between $86,000 and $110,000, with high gamma around $238 million expiring, which might increase volatility.
The maximum pain point for option sellers is at $96,000.
Open interest in $85,000 puts has declined, but $100,000 calls persist, suggesting cautious optimism for a potential “Santa rally.”

Currently, Bitcoin trades at $87,292, having experienced a 2.5% loss in the past 24 hours, with a 30% gap from its record high.

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