Bitcoin Options Expiry Looms: Brace for Major Market Moves Tomorrow

Derivatives traders are bracing for impact as a massive batch of Bitcoin options expires. The event could unleash significant volatility across crypto markets.

The Gamma Squeeze Catalyst

Large-scale expiries don't just settle contracts—they force market makers to rapidly adjust their hedging positions. This 'gamma' effect can amplify price swings, turning a routine expiry into a market-moving event. Think of it as a coiled spring suddenly released.

Where the Pressure Points Lie

All eyes are on the 'max pain' price—the strike level that would cause the most financial pain to option holders. If Bitcoin's spot price hovers near this level, the incentive to push it one way or another intensifies. It's a high-stakes game of financial chicken played with billions on the line.

Beyond the Immediate Ripple

The fallout won't be contained to Bitcoin. Major altcoins often move in sympathy, and leveraged positions across exchanges face liquidation triggers. The expiry acts like a tremor that can shake the entire crypto ecosystem—a reminder that traditional finance's derivative machinery, now bolted onto digital assets, still runs on the same old greasy gears of risk and greed.

So, fasten your seatbelts. Tomorrow isn't just a settlement date; it's a potential pivot point. And in crypto, pivots happen at lightning speed—usually just after some whale decides their quarterly bonus depends on it.

TLDR

• $28 billion in Bitcoin and Ethereum options set to expire on Dec. 26.
• Market makers use hedging to control Bitcoin price movements during expiries.
• Bitcoin’s price could see volatile shifts after tomorrow’s options expiry.
• Historically, January often brings bullish trends following options expiries.

Tomorrow, Dec. 26, marks the largest Bitcoin options expiry in history. The event, involving around $23.7 billion in Bitcoin options, is expected to create notable pressure on the market. Adding in ethereum and other cryptocurrencies, the total value of expiring options reaches approximately $28 billion. This marks a record-setting moment for the Bitcoin market.

Tomorrow is a big day for #Bitcoin.

Around $23.8 billion worth of BTC options expire, the largest expiry ever.

That’s more than 1% of Bitcoin’s market cap coming off in one go.

This is why price has been stuck between $85K and $90K.

Dealer hedging has been holding it there,… pic.twitter.com/dXOLxTc9uk

— Master of crypto (@MasterCryptoHq) December 25, 2025

With such a large expiry event, there is a lot of capital involved. Market makers and traders will have to manage their positions, which often results in a relatively calm and range-bound market in the lead-up to the expiry. The pressure from this hedging activity is expected to subside after the event, potentially leading to more volatility and price movement as we enter January.

The Role of Market Makers and Hedging Strategies

Market makers (MMs) are central to the dynamics of options expirations. These are entities that sell options to retail traders and take on the risk of the contracts expiring. MMs aim to profit by ensuring that the options they sell expire worthless. The price point where the largest number of options expire without value is known as the “max pain” price.

To manage risk, MMs often hedge their positions, buying or selling Bitcoin to neutralize the impact of changes in the market. This results in a “suppressive” force on Bitcoin’s price, keeping it within a specific range. By doing so, MMs try to prevent major price swings that would result in significant losses.

When options expire, MMs no longer need to hedge their positions, which can lead to a reduction in market pressure. This often leads to more volatility, as the suppression of price movements lifts. As the expiration passes, many expect to see a shift in Bitcoin’s price as volatility returns.

Bitcoin Market Behavior After Expiry

The period following the expiry of a major options event is historically marked by increased volatility. Bitcoin’s price tends to MOVE more freely once the hedging pressure is lifted. However, before a potential upward movement occurs, there might be a brief drop in the price as algorithms trigger stop-loss orders, hunting for liquidity in the market.

This volatility could create opportunities for traders looking to capitalize on price movements. Market participants should be prepared for fluctuations as bitcoin adjusts to the change in market dynamics. While a large drop is not expected, Bitcoin’s price may experience some downward pressure before rebounding.

January often sees an influx of new capital, especially as institutions look to re-enter the market after the holiday season. This could help support a potential rally for Bitcoin after the expiry event, making the beginning of the year a crucial time for the cryptocurrency.

Why Such Large Expiry Events Matter for Bitcoin

The significance of such large expiry events lies in the concentration of capital tied up in options contracts. With $28 billion in Bitcoin, Ethereum, and other cryptocurrency options set to expire, the event carries considerable weight in the market. These expiries force market makers to adjust their positions, which often leads to periods of price suppression, as mentioned earlier.

The impact of this event will be felt most in the short term, as traders and market makers settle their positions. Once the expiry is completed, the market could experience a surge in volatility, providing new trading opportunities. Additionally, the outcome of this event may influence the general market sentiment heading into 2026.

Given the historical patterns of options expirations, the expiry tomorrow may have a neutral-to-bullish effect on Bitcoin’s price over the coming weeks. However, it is important to note that the market will still be susceptible to broader economic conditions and news events.