Bitcoin prices edged lower on Tuesday, slipping beneath the $90,000 mark as thin holiday trading, shifting investor sentiment, and a record-breaking options expiry combined to weigh on crypto markets.
After briefly touching $90,000 on Monday, bitcoin retreated to around $87,400, extending a familiar pattern seen in recent weeks where rallies struggle to gain traction. The pullback spread across major digital assets. Ether fell to roughly $2,960, BNB eased to about $850, and Solana dropped near $125, dragging the total crypto market capitalization back toward $3 trillion, according to data.
Market participants remain cautious. Timothy Misir, head of research at BRN, described the environment as defensive, noting that upward moves lack momentum while declines, though modest, have been persistent.
That caution is also visible in institutional flows. U.S. spot bitcoin exchange-traded funds recorded $142 million in net outflows on December 22. In contrast, ether-based products attracted $84.6 million in inflows, while Solana and XRP ETFs saw more modest gains, suggesting selective positioning rather than broad risk appetite.
Record options expiry takes center stage
Attention is now firmly on Friday’s Boxing Day options expiry, which analysts view as the primary short-term driver of price action. Around 300,000 bitcoin option contracts, representing approximately $23.7 billion in notional value, are set to expire. This accounts for more than half of Deribit’s total bitcoin open interest.
Deribit’s Chief Commercial Officer, Jean-David Pequignot, called the event “record-shattering,” noting that combined bitcoin and ether options expiring total roughly $28.5 billion, about double last year’s level. Despite the scale, market conditions have remained relatively stable, with bitcoin’s implied volatility index hovering near 45.
Options positioning is concentrated around the $85,000 and $100,000 strike prices. Pequignot described this setup as reflecting lingering hope for a year-end rally, though conviction appears limited. Funding rates have also ticked higher, rising from 0.04% to 0.09%, signaling a renewed buildup of leveraged long positions even as market depth thins.
QCP Capital highlighted that traders are reducing risk rather than shifting it elsewhere. Bitcoin perpetual futures open interest dropped by roughly $3 billion overnight, while ether saw a decline of about $2 billion. With liquidity thinning during the holiday period, the firm warned that price moves could become more abrupt in either direction.
Both QCP and Misir pointed out that price swings during Christmas week often reverse once normal trading activity resumes in January, suggesting that current volatility may be driven more by mechanics than fundamentals.
Macro signals add to uncertainty
Outside crypto, gold surged to a new record near $4,450, underscoring growing demand for macro hedges into year-end. Misir said the divergence highlights how investors are positioning defensively amid political and economic uncertainty.
U.S. President Donald Trump recently confirmed he will announce his pick for the next Federal Reserve chair by early January. While not an immediate market catalyst, Misir said the development reinforces cautious positioning until greater clarity emerges.
As of December 23, bitcoin was on pace for its weakest fourth-quarter performance in eight years. The cryptocurrency is down about 6% for the year and has lost nearly 20% over the past six months.
