Bitcoin slipped under $88,000 during U.S. trading on Monday after briefly climbing above $90,000 earlier in the session, signaling heightened caution as a record $28.5 billion in Bitcoin and Ethereum options prepare to expire on Friday. Ethereum mirrored the broader market trend, retreating below $3,000 as traders navigated year-end positioning and potential volatility. The upcoming expiry on Deribit represents the largest in the derivatives exchange’s history, accounting for over half of its total open interest, and has drawn intense attention from institutional and retail participants alike.
Jean-David Pequignot, Deribit’s chief commercial officer, noted that the year-end expiry encapsulates a year of institutional maturation in the crypto space, moving the market from speculative cycles toward a policy-driven supercycle. Analysts highlight that the $96,000 level represents maximum pain for Bitcoin option writers, while significant open interest exists at the $85,000 put strike. Should selling pressure intensify, these positions could exert downward pressure on spot prices, reflecting the delicate balance between bullish and defensive strategies.
Traders appear to be rolling protective positions forward rather than exiting them entirely. December $85,000 puts have largely shifted into January’s $80,000 to $75,000 spreads, indicating a strategy designed to hedge immediate year-end risks while maintaining caution heading into 2026. At the same time, midterm call spreads targeting $100,000 to $125,000 remain active, though the cost of short-term protective puts has increased, and the skew between calls and puts has narrowed, suggesting a tempered optimism rather than unchecked bullishness.
Despite the pullback in crypto prices, some related equities showed resilience. Hut 8 shares jumped 16% following a 15-year AI data center lease agreement with Fluidstack, supported by an upgraded price target from Benchmark analyst Mark Palmer. Coinbase and Robinhood also traded positively, although gains were trimmed late in the session as cryptocurrency prices softened. This divergence underscores how strategic corporate developments and broader market positioning can influence crypto-related stocks independently of spot market fluctuations.
Looking ahead, the market faces a critical test as Deribit’s historic options expiry approaches. The interplay between open interest, hedging strategies, and broader institutional involvement will likely dictate near-term volatility. For investors and market observers, Monday’s price action underscores the importance of cautious positioning, highlighting that even in a year marked by institutional adoption, crypto markets remain sensitive to technical and derivatives-driven dynamics.
