The Christmas holidays have just ended, and the cryptocurrency market remains chilly. Early morning on December 26th (Taipei time), Bitcoin (BTC) briefly dipped below $87,000 again, before recovering to $87,282 by press time, a 0.42% decrease over the past 24 hours.
Ethereum (ETH) also briefly fell below the $2,900 mark, currently trading at $2,914, while the overall cryptocurrency market capitalization has shrunk to approximately $3.023 trillion.
270,000 option contracts expired, with long and short hedging intertwined.
It's worth noting that today also marks the largest cryptocurrency options settlement day in history. According to data from options trading platform Deribit, approximately 270,000 BTC options will expire, with a notional value of $23.3 billion; if ETH is included, the total size reaches $27 billion, double that of the same period last year.
The maximum pain point is around $95,000. If prices move closer to this level, open positions will face maximum losses. On the other hand, market makers need to quickly buy and sell spot goods before expiration to hedge against Gamma risk. With low liquidity during holidays, prices are prone to sharp spikes or drops.
CZ: Initially defined by emotion
In response to market volatility, Binance founder CZ(CZ) posted an article on the X platform earlier, reminding the public to focus on FUD (Factual Uncertainty) rather than the price itself. He stated:
Every time Bitcoin hits a new all-time high, has the thought "I should have bought it sooner" ever crossed your mind?
Actually, those who "bought early" didn't enter the market at historical highs, but rather bought in a time filled with fear, uncertainty, and doubt.
Merry Christmas everyone!
CZ defines "early" as a low point in sentiment rather than a chronological order, suggesting that the current $87,000 range is at a psychological discount level.
Altcoin are showing divergent trends, with funds shifting towards specific themes.
However, amidst the overall market downturn, some Altcoin bucked the trend and rose. Data shows that BIFI surged 78% in a single day, ZBT rose 55.2%, and 0G also jumped 29.3%; conversely, METIS and BANANA plummeted 12.8% and 12.05% respectively. This reflects the market's continued pursuit of short-term gains while remaining cautious about the future of mainstream cryptocurrencies.
Traders generally expect that after the options settlement, as hedging positions are unwound, the market will enter a brief "repricing" vacuum period, at which time the direction may become clearer. However, given the thin trading volume during the holiday, analysts warn that the probability of short-term fluctuations of several thousand dollars in BTC is significantly increased in the next 48 hours, and investors need to manage leverage and pay attention to liquidity risks.
