Bitcoin News Today: Bitcoin Tumbles From $89,100 As $28B Options Expiry Fuels Volatility

Bitcoin, Ethereum, and other major cryptocurrencies experienced sharp price fluctuations on December 26, 2025, as traders navigated the largest Bitcoin options expiry in Deribit history. The price of Bitcoin initially surged 1.63% to over $89,100 before retreating to hover near $88,500. The market's volatility was fueled by a record $28 billion in Bitcoin options set to expire, prompting traders to reposition ahead of the deadline according to financial reports.

Ethereum followed a similar pattern, with price action influenced by the same expiry event. XRP and Dogecoin also showed signs of wobbling, as market participants remained cautious ahead of the year-end. The total crypto market capitalization fluctuated between $2.96 trillion and $3.07 trillion, reflecting a mixed performance across altcoins and a general thinning of liquidity as the year came to a close according to market analysis.

The pressure on crypto ETFs also intensified, with Bitcoin and Ethereum spot ETFs witnessing outflows surpassing $1.13 billion in mid-December. Data from Glassnode and SoSoValue highlighted a sustained negative trend in ETF flows for both assets, underscoring reduced institutional participation and a cautious market environment as 2025 ended according to analyst reports.

How Markets Reacted

Bitcoin's short-term price action reflected a mix of short-covering and genuine buyer interest. Analyst Ardi noted that the first leg of the upward move was due to the closure of short positions ahead of the expiry, while the second leg demonstrated stronger demand from high-volume buyers. Daily trading volume surged 36% to $30 billion, indicating growing bullish sentiment among traders according to market data.

However, the market remains fragile. Bitcoin failed to reclaim the $90,500 level, a key psychological benchmark, and traders remain wary of a potential short-term decline. Ardi emphasized that a sustained bullish reversal would require Bitcoin to hold above $94,000, with volatility expected to remain elevated as traders manage their positions ahead of the expiry according to technical analysis.

Ethereum mirrored Bitcoin's behavior, with price failing to maintain a foothold above $3,000.

The total Ethereum spot ETF outflows for the week reached $6.439 billion, outpacing Bitcoin's $4.971 billion in redemptions. The outflows signaled a broader disengagement from institutional investors, who are likely prioritizing risk management and capital preservation as the year concludes according to ETF data.

What Analysts Are Watching

The coming weeks will be crucial in determining whether the current consolidation phase leads to a larger directional move. Analyst Daan Crypto Trades noted that Bitcoin is entering a compression phase, with a key period in January 2026 potentially shaping the next major trend. The analyst emphasized that Bitcoin must either break out above key resistance levels or face a retest of critical support to establish a clear direction according to market commentary.

On the macro side, analysts are also watching for signs of easing financial conditions. In 2025, Bitcoin's performance was shaped by structural factors such as declining Federal Reserve liquidity and stable real yields. While on-chain metrics have defined market structure, valuation ceilings remain tied to macroeconomic variables. A potential shift in U.S. monetary policy or renewed global liquidity could trigger the next Bitcoin rally according to macroeconomic analysis.

The Ethereum spot ETF outflows also raised questions about the broader altcoin market. While Bitcoin and Ethereum faced redemptions, smaller assets like XRP and Solana saw inflows, indicating selective rotation rather than a complete sector exit. This suggests that investors are not abandoning crypto but are instead reallocating capital based on perceived value and risk according to market reports.

Risks to the Outlook

Despite the cautious market tone, the absence of panic selling and extreme volatility has led some analysts to view the current environment as a sign of market stabilization. Anthony Pompliano argued that Bitcoin's lower volatility could limit downside risks, as the asset has not seen the kind of speculative excess that typically precedes deep corrections. However, others remain wary, with Peter Brandt and Jurrien Timmer warning of potential deeper retracements if macroeconomic conditions deteriorate according to market commentary.

Corporate treasury strategies have also become a point of discussion. Companies across sectors have increasingly adopted Bitcoin and Ethereum as part of their balance-sheet strategies, following the playbook of firms like Strategy (MSTR) and Forward Industries. While this trend suggests growing institutional acceptance of crypto, analysts caution against inconsistent execution and overleveraged positions that could lead to volatility according to corporate reports.

With the year drawing to a close, the immediate focus remains on Bitcoin's ability to stabilize above $88,500 and Ethereum's potential to reclaim $3,000. The next few weeks will be critical for determining whether the market consolidates or experiences a sharp directional move. Investors are advised to remain cautious and monitor both technical levels and broader macroeconomic signals as 2026 approaches.