Options expiration stirs up Bitcoin's trend, leading to a stalemate

December 26, 2025, Bitcoin faces a test with $28 billion in options expiring. The price initially surged above $89,100, then oscillated around $88,500. Behind this market movement, there was both short covering and genuine buying interest. Now, entering the first quarter of 2026, BTC has fallen back to $71,140. The intense volatility over the past three months highlights the profound impact of options expiration on the cryptocurrency market.

$28 Billion Options Expiration Eve: Bitcoin Price Shows Major Fluctuations

Options expiration often marks a turning point in crypto markets. During the week of December 26, Bitcoin options saw a record-breaking expiration scale, initially reported at $23.7 billion, later revised by media to $28 billion. Such a massive options volume expiring prompted traders to adjust their positions, directly driving two-way market volatility.

Well-known analyst Ardi pointed out that Bitcoin’s surge to $89,100 coincided with a period when many short positions needed to be closed. He shared on Twitter that the first wave of upward movement was mainly driven by short covering, as traders hurried to close positions, pushing prices higher. Interestingly, the second wave of rally exhibited entirely different characteristics — driven by genuine bullish buying with high trading volume, as institutions and large investors entered when Bitcoin broke through local resistance zones.

This market behavior was unique because it reflected both mechanical technical fluctuations (position adjustments due to options expiry) and real market demand (bullish buying interest).

Trading Volume Surges, Market Sentiment Turns Bullish

On the day of options expiration, Bitcoin’s 24-hour trading volume surged 36%, reaching $30 billion — an important indicator of market participation. High trading volume generally indicates active market engagement and sentiment, which can signal a bullish trend but also lead to short-term sharp fluctuations.

Daan Crypto Trades analyzed at the time that Bitcoin was entering a “compression phase.” In simple terms, the price was repeatedly testing high and low levels, lacking a clear direction in the short term. In this stalemate, the large capital movements caused by options expiry acted as a “catalyst,” easily triggering 5-10% one-sided large swings.

Technical Resistance: A Break Above $94,000 Needed for Reversal

Despite the impressive rally on December 26, Ardi remained cautious about the outlook. He emphasized that this surge had not yet confirmed a sustained bullish reversal. For a true bullish trend, Bitcoin needs to break back above the key resistance at $94,000. Until then, short-term risks of a pullback remain.

On a broader timeframe, the 4-hour chart shows the 200 MA/EMA forming a headwind, with prices increasingly compressed, hinting at a potential large-scale directional move ahead. Technical signals remain unclear, which is why most analysts advise investors to stay cautious and wait for a proper breakout confirmation before entering new positions.

Compression Phase Brewing a Turning Point, January Will Reveal All

Looking ahead, analysts generally agree that January 2026 will be a critical period for determining Bitcoin’s next major trend. Daan emphasized that $94,000 is an important resistance level; if it can be sustained and broken, a move back toward $100,000 or higher is possible. Conversely, a drop below $80,000 support could turn the market outlook more bearish.

While options expiration acts as a short-term catalyst, the long-term trend depends on macroeconomic conditions, policy changes, and institutional capital flows. By the first quarter of 2026, Bitcoin has fallen to $71,140, nearly 20% below its December high. This serves as a reminder that crypto market volatility far exceeds traditional assets, and each options expiry can bring new turning points.

In such an environment, tracking options data, understanding volume shifts, and monitoring key technical levels are essential skills for participants. The next major options expiration event could again shake the market, making cautiousness a prudent approach for investors.