By Laurenz Van de Sande | Europe | December 27, 2025| 13:27 CET

Key Points

• The crypto market pulled back sharply during U.S. trading hours as investors braced for the year’s largest options expiry.
• Bitcoin and Ethereum options worth more than $28 billion are set to expire on Dec. 26.
• Thin holiday liquidity could amplify volatility before and after the expiry.
• Technical signals in Bitcoin point to elevated downside risk in the near term.

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NEW YORK — The cryptocurrency market retreated abruptly during the American trading session on Friday, erasing earlier gains as traders positioned cautiously ahead of the largest options expiration of the year.

Bitcoin fell back below $87,000 after touching an intraday high near $89,000, while several major altcoins posted sharper declines. Binance Coin, Dogecoin and other large-cap tokens slid more than 3 percent over the past 24 hours, reflecting a broader pullback across digital assets.

“The market is essentially holding its breath,” said a derivatives analyst at a major crypto trading firm. “With such a large amount of open interest expiring at once, even small shifts in positioning can create outsized price moves.”

The retreat mirrored subdued activity in U.S. equities, where the Dow Jones Industrial Average slipped roughly 0.7 percent. Both stock and crypto markets have seen lighter volumes, a seasonal effect as many traders remain away for the holidays.

Later Friday, the crypto industry faces what is widely described as its most consequential options event of the year. Bitcoin options worth more than $23 billion and Ethereum options valued above $4 billion are set to expire on Deribit, the largest crypto options exchange.

Bitcoin’s options market currently shows a put-call ratio of about 0.38, indicating a bullish skew, with call options significantly outnumbering puts. The largest concentration of bullish bets is clustered between $100,000 and $116,000, while the so-called “maximum pain” level — where the most contracts expire worthless — sits near $96,000.

Ethereum options tell a similar story. Roughly 1.28 million ETH contracts are due to expire, with a put-call ratio between 0.43 and 0.45, also suggesting a bullish bias. The heaviest strike concentration lies between $3,000 and $3,100, with maximum pain centered at $3,000.

Still, analysts caution that bullish positioning does not guarantee higher prices. “Options expirations are often volatility events, not directional ones,” said another market strategist. “And with liquidity thin, price swings can be exaggerated in both directions.”

Historically, the crypto market has tended to experience heightened volatility in the hours and days surrounding large expirations, a pattern that could be intensified by the current holiday slowdown in trading activity.

Beyond derivatives dynamics, Bitcoin’s technical picture is adding to investor unease. On longer time frames, the asset continues to trade under pressure, with several bearish chart formations taking shape.

Bitcoin has traced out a rising wedge — a pattern formed by two converging upward trendlines — alongside a bearish pennant structure that often precedes continuation moves lower. At the same time, the gap between the 50-day and 200-day weighted moving averages has narrowed sharply, raising the risk of an impending “death cross,” a signal many traders interpret as bearish.

“If Bitcoin breaks decisively below recent support, the next area to watch is around $80,000,” said a technical analyst who tracks crypto markets. “A failure there could open the door to a deeper pullback toward $75,000.”

As the options expiry approaches, market participants remain on edge. Whether the event acts as a pressure release or a catalyst for further selling may depend less on positioning and more on how prices react once billions of dollars’ worth of contracts come off the board.

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