Why is Bitcoin (BTC) Still Falling? Analysts Agree on the Reason and Warn of the Upcoming Critical Day!
Bitcoin (BTC) remains below $90,000 ahead of Christmas, with analysts warning of a record-high option expiration date on Friday.
Analysts cite decreased liquidity due to the Christmas holiday and increased demand for traditional safe havens like gold as the main reasons why Bitcoin remains below $90,000. These factors are putting pressure on risky assets like Bitcoin.
Speaking to The Block, BRN research head Timothy Misir assessed the current situation in Bitcoin and said, “The overall trend in Bitcoin remains defensive. While rallies lack continuity, sell-offs are shallow but persistent.”
From another perspective, the cryptocurrency market is focused on the large-scale option expiration (Boxing Day) on the 26th. This upcoming expiration is among the main reasons putting pressure on the Bitcoin price.
According to Deribit data, approximately 300,000 BTC worth of option contracts will expire on December 26th, which corresponds to a nominal value of approximately $23.7 billion.
Furthermore, this represents more than half of the total open positions in Bitcoin options on Deribit.
Deribit’s Director of Commercial Affairs, Jean-David Pequignot, said that the expiration date of December 26th was a record-breaking figure.
“The total expiry volume of Bitcoin and Ethereum options is approximately $28.5 billion, doubling compared to the previous year.”
According to the data, a Deribit executive stated that options positions are concentrated in the $85,000 to $100,000 range.
In conclusion, while some investors still hold onto a limited hope for a Christmas Rally based on option positioning, overall market sentiment remains cautious.
Indeed, spot Bitcoin ETFs experienced a net outflow of $142 million per day, and the price continues to be under pressure below $90,000. This confirms the wait-and-see approach.
*This is not investment advice.