Bitcoin News Today: Bitcoin Traders Watch $90,616 as Gamma Expiry Eases Hedging Drag

Bitcoin traders are bracing for a potential turning point as a significant gamma flush looms over the next eight days. Analyst David Eng has highlighted the expiry dates of December 19 and December 26 as critical, with a combined $415 million in dealer gamma exposure set to roll off. At press time, Bitcoin traded around $87,953, remaining within a tight $85,000–$90,000 range.

The gamma flush is expected to ease the hedging drag that has been suppressing price action, according to Eng, who has been closely tracking the impact of dealer gamma on Bitcoin's volatility. He argues that the current price is held back by two major expiries, with $128 million expiring on December 19 and $287 million on December 26.

Eng's analysis underscores the mechanical nature of the current market dynamics. If dealers are exposed to meaningful gamma in a tight cluster of strike prices, their delta-hedging activities can dampen volatility and pin the spot price within a range until the exposure decays or expires. This phenomenon can create a frustrating sense of inertia for traders.

Why the Standoff Happened

Eng's map is built around specific price levels where hedging pressure has been particularly strong. The $85,000–$90,000 range is described as a "mud zone," where the market is struggling to break free.

The "double-barreled" liquidity event is expected to wipe out 67% of the derivatives board by December 26. This, according to Eng, could ease the hedging drag that has been compressing spot price action. The combined $415 million gamma flush is seen as a significant structural event that could alter the market dynamics.

How Markets Reacted

Bitcoin's price has been fluctuating within a defined range, with intraday swings between roughly $84,461 and $89,230. The market is currently deep in the -25% Value Zone, with a natural gravity point at $118,000. The current suppression mechanism is expected to ease after December 26, according to Eng. This could lead to a regime shift in realized volatility and price action.

The impact of the gamma flush is not just mechanical but also structural. Eng has noted that dealer gamma forces are currently 13 times stronger than ETF flows, which explains why the market is adhering to technical gamma levels rather than responding to ETF volume. This dynamic has been a key factor in the current price consolidation.

What Analysts Are Watching

The next few days are crucial for market participants, with December 19 marking the first stage of the gamma flush. If Bitcoin can clear the $90,616 level, the intraday shackles that have been pinning it below this threshold could fall off. However, the larger event on December 26 is seen as the more critical test. This expiry involves $287 million in gamma exposure, which is 46.2% of all dealer gamma exposure.

Analysts are also watching the broader market dynamics, including the impact of the quadruple witching event in the S&P 500 and the potential influence of the Bank of Japan's monetary policy decisions. These factors could affect risk appetite and, by extension, Bitcoin's price. The interplay between these macroeconomic events and the gamma flush could determine the next phase of Bitcoin's price action.

What This Means for Investors

For investors, the next eight days present both risks and opportunities. If the gamma flush leads to a significant easing of hedging pressure, it could unlock new price levels that have been unreachable due to the current structural constraints. However, the market is expected to remain in a "thick mud" phase until December 26, with the suppression mechanism still in place.

The potential for increased volatility after December 26 could also create new trading opportunities. Investors should monitor the $90,616 level on December 19 and the broader $85,000–$90,000 range for signs of a breakout. The key will be whether the market can absorb the liquidity released by the gamma flush without causing a significant price correction.