[Analysis] "Bitcoin falls below $90,000 again…Volatility caution ahead of $28 billion options expiry"

Bitcoin (BTC) has fallen below the $90,000 level again ahead of Christmas, and analysis says a large options expiry has emerged as a key factor that could increase short-term volatility.

On the 23rd, according to crypto-focused media The Block, Bitcoin touched $90,000 intraday the previous day but failed to sustain the upward trend and was pushed down to around $87,400. With liquidity rapidly drying up ahead of the holidays, there is a stronger preference for traditional safe-haven assets like precious metals, putting pressure on risk assets across the board.

The market is focusing on the large options expiry scheduled for the 26th (local time). At this Boxing Day expiry, options contracts amounting to about 300,000 BTC are set to expire, with a notional value of roughly $23.7 billion. This exceeds half of total Bitcoin options open interest on Deribit.

Deribit explained that the total options expiry size combining Bitcoin and Ethereum is about $28.5 billion, double that of the previous year. However, the volatility index remains in a neutral zone, leading some to assess that the market is not yet excessively betting in one direction.

Option positions are concentrated around the $85,000 and $100,000 levels. Some still hold limited expectations of a 'Santa rally', but the prevailing analysis is that overall market sentiment is defensive. In fact, Bitcoin spot ETFs saw net outflows of $142 million in a single day, confirming a wait-and-see stance.

The market expects that price movements during the holiday period are more like technical moves due to supply-demand gaps, and that a clear direction is more likely to materialize after liquidity returns in the new year.