Bitcoin News Today: Bitcoin Trapped in $85K–$90K Range as Options Expiry Looms

Bitcoin and Crypto Markets Face Volatility Amid Options Expiry and Macroeconomic Uncertainty

Bitcoin's price hovered near $87,000 on December 26, 2025, as the cryptocurrency remained trapped in a $85,000 to $90,000 range for much of the month. Traders and analysts attributed the consolidation to heavy hedging activity tied to a $27 billion open interest event on Deribit. The market's behavior, shaped by options mechanics and macroeconomic uncertainty, underscored the delicate balance between bearish sentiment and speculative bullishness.

The crypto market capitalization stood just above $3 trillion, but Bitcoin dominance remained elevated, signaling a preference for the largest cryptocurrency during times of uncertainty. Meanwhile, gold reached record highs, drawing investors to traditional safe havens amid fears of extended U.S. interest rates and geopolitical tensions.

As Bitcoin neared the upper end of its range, analysts pointed to key technical levels that could determine its next move. The upcoming options expiry, with a strong call bias and a max pain point at $96,000, suggested a higher probability of an upward resolution.

Options Expiry and Gamma Decay

The $27 billion in Bitcoin options set to expire on December 26 represented the largest such event in Deribit's history. With a put-call ratio of just 0.38, the market was skewed toward bullish bets, particularly around $100,000–$116,000 strike prices. Gamma, a measure of delta sensitivity, had created a self-reinforcing range during December, with dealers forced to buy near $85,000 and sell near $90,000 to hedge positions.

As expiry approached, gamma and delta decay weakened this stabilizing effect. Analysts suggested that reduced hedging pressure could allow Bitcoin to break out of the range, with the max pain point at $96,000 offering a likely destination.

Macroeconomic Headwinds and Liquidity Concerns

Despite the technical setup for a breakout, macroeconomic uncertainty continued to weigh on investor sentiment. U.S. data releases, including third-quarter GDP and consumer confidence figures, could influence expectations for Federal Reserve rate cuts. Market participants remained cautious ahead of these reports, which could either bolster risk-on sentiment or reinforce a risk-off stance according to market analysis.

Bitcoin's volatility was also amplified by thin liquidity and reduced trading volume during the holiday-shortened week. A 1.39% drop in Bitcoin and a 2% decline in Ethereum reflected broader market fragility. The Fear & Greed Index, at 29, confirmed that fear remained dominant among traders.

Liquidity Risks and Derivatives Exposure

The market faced significant liquidity risks as large open interest positions neared expiry. Coinglass estimated $1.017 billion in long liquidations if Bitcoin fell below $86,000 and $677 million in short liquidations if it broke above $90,000. These thresholds highlighted the fragility of the current range, with even minor price movements potentially triggering cascading liquidations.

Traders also watched closely as Bitcoin's Volmex implied volatility index approached one-month lows, suggesting that traders were not pricing in significant near-term price swings. This lack of volatility expectation contrasted with the high gamma environment earlier in the month, where dealers were forced to hedge aggressively.

Strategic Shifts in Bitcoin Treasury Management

Bitcoin treasury strategies, particularly those of firms like MicroStrategy (MSTR), have evolved as market conditions shifted. MSTR and other firms now emphasized liquidity buffers, hedging, and selective monetization to defend against potential drawdowns. This shift reflected growing recognition of the risk of a deep or extended Bitcoin correction, as seen in the bearish signals from on-chain and technical indicators according to analysis.

The bearish sentiment was also evident in Bitcoin's Bull Score Index, which dropped to zero for the first time since January 2022. This metric, developed by CryptoQuant, signaled a market environment more akin to the previous bear cycle than a sustained bull trend.

What This Means for Investors

Investors navigating the current environment needed to balance speculative potential with downside risk. The upcoming options expiry created a high-stakes scenario, with a strong likelihood of a directional move toward $96,000. However, macroeconomic developments, particularly around U.S. interest rates, could introduce unexpected volatility.

For those with exposure to Bitcoin and altcoins, maintaining liquidity and hedging strategies remained critical. The recent drawdown highlighted the importance of portfolio resilience, particularly in an environment where large liquidation events could trigger sharp price moves.

As the crypto market approached year-end, the interplay between derivatives activity, macroeconomic trends, and investor sentiment would continue to shape Bitcoin's trajectory.