Bitcoin News Today: Bitcoin ETFs Post Third Straight Day of Outflows as $23B Options Loom

Bitcoin faces a volatile week ahead as the largest options expiration in history looms on December 26, with a record $23 billion in open interest set to expire. This event comes amid ongoing outflows from Bitcoin spot ETFs, with a third consecutive day of redemptions totaling $142.2 million. Analysts are closely watching whether the expiry could trigger sharp price swings, especially as liquidity thins during the holiday week.

The ETF outflows have been driven by major players such as BITB, HODL, and Grayscale BTC, with BlackRock's IBIT being one of the few funds posting inflows. These trends point to a broader reallocation within crypto-tracking products rather than a wholesale shift in investor sentiment according to data.

Meanwhile, Bitcoin's price has shown signs of stabilization, trading near $88,000 as bulls aim for a short-term breakout.

The growing institutional presence in crypto derivatives markets is evident from the record options volumes and the increasing influence of ETF flows on price discovery. As open interest concentrates in high-strike calls and lower-strike puts, the potential for exaggerated price movements is high. This is further compounded by the thin liquidity environment, which could amplify swings as traders unwind positions ahead of the expiry.

Risks to the Outlook

Bitcoin's path forward is clouded by both short-term and long-term risks. Market analysts have flagged a potential for a deep or extended drawdown as a non-trivial possibility. The bearish momentum is underscored by multiple on-chain and technical indicators, including a recent drop in CryptoQuant's Bull Score Index to zero for the first time since 2022. This signals a heightened risk of a protracted downturn.

For now, Bitcoin remains below critical moving averages and is trading within a descending trendline, which could restrict upward movement in the near term. The 50-day EMA is at $94,207, and a close above this level would be needed to confirm a reversal in the bearish bias. Until then, downside risks remain, with key support levels such as $80,000-$82,000 seen as a potential rebound zone if the price drops further.

Ethereum faces a similar struggle, with spot ETFs recording a weekly outflow of $643.97 million and a cumulative outflow of nearly $97 million on Thursday. The coin is currently holding above $2,900, but its position under the 50-day EMA and weak technical indicators suggest ongoing bearish pressure. The lack of a strong recovery day in the week contrasts with Bitcoin's brief inflow on December 17, highlighting weaker demand for Ethereum-based exposure.

What This Means for Investors

Investors are becoming increasingly selective in the current market environment. While Bitcoin and Ethereum continue to experience outflows, XRP and Solana-linked ETFs have shown resilience, with XRP posting $82.04 million in inflows over the week. This divergence suggests a shift in preference toward assets perceived as less volatile or with strong ecosystem-specific catalysts.

The BlackRock iShares Bitcoin Trust (IBIT) remains a key theme for 2025, despite the recent outflows. The fund has drawn over $25 billion in inflows this year, positioning it as one of the top ETFs by volume. BlackRock's decision to highlight Bitcoin alongside traditional financial instruments like Treasuries reflects a growing institutional acceptance of the asset, which could influence broader adoption.

Market participants will be watching for signs of stabilization as the December 26 options expiry approaches. A rebound in ETF inflows or a sustained move above key technical levels could signal a shift in sentiment. For now, however, the path of least resistance remains to the downside, with Bitcoin's price likely to remain sensitive to macroeconomic and regulatory developments in the coming weeks.