Ever feel like the crypto market is holding its breath? That’s exactly what’s happening right now with Bitcoin. As we kick off 2026, the king of crypto is just… sitting there, bouncing lazily between $87,000 and $89,000 like it can’t decide what to do next. And honestly, I get it—there’s a huge event on the horizon that’s got everyone on edge.
Today, January 2, a whopping $1.85 billion worth of Bitcoin options are set to expire. That’s not pocket change; it’s enough to sway the market in meaningful ways. Traders aren’t piling into big bets. Instead, they’re playing it safe, waiting to see how this unwind plays out. It’s classic pre-expiry behavior, and if you’ve been around the block in crypto, you’ve seen this movie before.
In my view, these moments are fascinating because they strip away the noise. No wild hype, no FOMO-driven pumps—just pure hesitation as positions get adjusted or closed out. Let’s dive into what’s really going on and what might come next.
Why Bitcoin Feels Stuck in Neutral Right Now
Picture this: Bitcoin closed out 2025 on a somewhat disappointing note, down about 7% for the year and a far cry from its mid-cycle highs above $120,000. Fast forward to now, and it’s trading around $88,300—up a smidge in the last day but still trapped in a narrow band.
The past week? Pure sideways action. Lows around $87,000, highs barely touching $89,000. No one’s winning the tug-of-war between buyers and sellers. Spot volumes have tanked—down over 40% in a single day recently—to just $21 billion. That’s thin liquidity, folks, the kind that makes any sudden move feel amplified.
Derivatives tell a similar story of caution. Futures trading volumes dropped nearly 40%, while open interest barely budged. Traders are holding onto positions rather than flipping them aggressively. It’s like everyone’s parked their capital, waiting for clarity.
In quiet markets like this, the real action often hides in the shadows until a catalyst forces it out.
And that catalyst? Today’s options expiry.
Breaking Down the $1.85 Billion Options Expiry
Options are fascinating instruments. They give holders the right (but not the obligation) to buy or sell at a preset price. Calls bet on upside, puts on downside. When a big batch expires, it can create ripples as traders delta-hedge or roll positions.
This particular expiry carries a notional value of $1.85 billion for Bitcoin alone. Add in Ethereum’s $390 million, and we’re looking at serious money settling. The put/call ratio sits at 0.48—a number below 1 signals more calls than puts, hinting at mild bullish leanings overall.
Perhaps the most intriguing metric is the max pain point: around $88,000. That’s the strike where the most options would expire worthless, maximizing “pain” for buyers while sellers walk away happy. Prices often gravitate toward max pain as expiry approaches—dealers hedge in ways that pin the spot price there.
Right now, Bitcoin’s hovering close to that level. No surprise it’s feeling heavy above $89,000 and supported below $87,000. Post-expiry, though? Those hedging pressures vanish. The market could breathe freer, potentially unlocking a bigger directional move.
- Low put/call ratio suggests cautious optimism
- Max pain near current price explains the chop
- Expiry often acts as a volatility unlock
- Traders may roll into later dates, extending uncertainty short-term
I’ve seen expiries like this before—sometimes they pass quietly, other times they spark fireworks. Given the subdued volumes, I’m leaning toward the former today, but keep an eye on post-settlement flows.
What Derivatives Data Is Really Saying
Beyond options, the broader derivatives landscape paints a picture of hesitation. Open interest in futures remains elevated around $55 billion, but new positions aren’t flooding in. That’s classic de-risking ahead of events.
Implied volatility has compressed too. When IV drops, it often precedes periods of low realized volatility—exactly the sideways grind we’re in. But compression can’t last forever. Bollinger Bands on the daily chart are squeezing tight, a textbook setup for an eventual expansion.
Funding rates in perpetual futures are neutral, neither strongly positive nor negative. No extreme leverage buildup on either side. It’s balanced, almost eerily so.
Markets in equilibrium like this rarely stay that way. Something’s got to give.
– A seasoned crypto observer
In short, derivatives aren’t screaming bull or bear. They’re whispering “wait and see.”
On-Chain Signals: Late-Cycle Vibes?
Zoom out to on-chain metrics, and things get interesting. One key indicator tracks the percentage of Bitcoin supply held in profit—currently around 69%.
Historically:
- Below 55%: Deep bear territory
- Above 80%: Frothy bull runs
- Around 70%: Transitional phases, often late-cycle
We’ve been grinding lower from October peaks above 80%. No sharp crash, just a slow bleed. That pattern has appeared before in maturing cycles. If it climbs back toward 75-80%, fresh highs become more likely. Lingering here raises odds of broader correction.
Exchange outflows have picked up modestly, suggesting some holders are moving to cold storage—bullish for long-term supply dynamics. But realized profits from older coins aren’t surging either. Mixed bag, really.
Perhaps the most telling is the lack of euphoria. No rampant leverage, no sky-high social sentiment. That’s healthy in a way; corrections in calm markets often set up stronger legs higher.
Technical Setup: Compression Building
Let’s talk charts. Bitcoin’s daily structure shows lower highs and lows over broader timeframes, but recent action has consolidated tightly.
Bollinger Bands are narrowing dramatically—volatility at multi-week lows. Price hugs the lower half but hasn’t broken key supports yet.
RSI sits near 48: neutral, no overbought/oversold extremes. Momentum’s stabilized, but buyers haven’t stepped up convincingly.
| Key Level | Type | Implication |
| $86,000 – $87,500 | Support Zone | Multiple bounces; break risks downtrend resumption |
| $89,500 – $91,000 | Resistance | Daily close above signals recovery potential |
| $88,000 | Max Pain / Pivot | Current magnet; post-expiry shift likely |
A clean break higher would flip the short-term bias bullish. Losing support? That opens doors to deeper retracements, perhaps testing ETF cost bases lower down.
One thing’s clear: this compression won’t hold indefinitely. Expiries often mark inflection points.
Broader Context: What 2026 Might Hold
Stepping back, 2025 was a year of highs and reality checks. Spot ETFs brought billions in inflows, but price failed to sustain above six figures. Institutional adoption grew, yet retail enthusiasm waned amid higher rates and macro uncertainty.
Entering 2026, the setup feels transitional. Rate cuts could resume if economies soften, providing tailwinds for risk assets like Bitcoin. Regulatory clarity continues evolving positively in spots.
But cycles matter. Halving effects linger, yet we’re farther along than in prior runs. Supply dynamics remain bullish long-term—miners holding, ETFs accumulating on dips.
Personally, I think the path of least resistance post-expiry leans higher, but only if we clear $91,000 convincingly. Otherwise, more chopping awaits.
Risks to Watch in the Coming Days
- Post-expiry gamma squeeze: Unwinding hedges could push price sharply
- Thin holiday liquidity amplifying moves
- Macro headlines—Fed minutes, economic data
- ETF flow reversal if sentiment sours
- Altcoin rotation draining BTC dominance temporarily
No market moves in a straight line. Volatility tends to cluster around events like this.
Final Thoughts: Patience Pays in Crypto
As this expiry settles, remember why many of us are here: Bitcoin’s long-term story remains intact. Scarcity, adoption curves, network effects—the fundamentals haven’t vanished amid short-term noise.
That said, trading the range has been frustrating. I’ve found the best approach in times like these is sizing positions modestly and waiting for confirmation. No need to force trades when the market’s whispering caution.
Whatever direction breaks first, it’ll likely carry momentum. Until then, grab a coffee and watch the screens. Crypto never stays quiet for long.
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