Options market data suggest that Bitcoin is heading into the final weeks of 2025 under intense pressure. Approximately US$23 billion worth of contracts are set to expire next Friday, a development that could further amplify already elevated market volatility.

This amount represents more than half of the total open interest on Deribit, the largest Bitcoin options exchange. The looming concentration of expiries indicates that traders are increasingly pricing in continued downside risks amid a more fragile market environment.

Bitcoin experienced price swings exceeding US$130 billion within a single hour during U.S. trading on Wednesday local time. The sharp turbulence triggered widespread liquidations across both long and short positions. Meanwhile, the broader cryptocurrency market hovered around the US$3 trillion capitalization threshold.

“The market continues to drift lower as we approach the New Year, with prices sitting on a knife’s edge,” said Nick Forster, founder of digital asset trading platform Derive.xyz.

On Thursday, Bitcoin briefly climbed as much as 4% to US$89,430 before giving up those gains. The world’s largest cryptocurrency by market value has now fallen roughly 30% from its record high above US$126,000 reached in early October. As of 8 a.m. in Singapore on Friday, Bitcoin was trading at around US$85,465.

“Bitcoin positioning remains firmly bearish. Thirty-day volatility has climbed back toward 45%, while skew remains around -5%. Longer-dated skew is also anchored near -5%, signaling that traders continue to price in downside risks through the first and second quarters, as persistent selling pressure from previously inactive wallets weighs on spot prices,” Forster explained, referring to skew as a measure of the relative cost of downside protection versus upside exposure.

Positioning ahead of the December 26 expiry reflects this divide. Call options are heavily clustered at strike prices of US$100,000 and US$120,000, indicating lingering optimism for a year-end rebound. However, bearish sentiment dominates the near-term outlook, with substantial put option exposure building around US$85,000. According to STS Digital, this level holds roughly US$1.4 billion in open interest and could act as a gravitational pull for prices as expiry approaches.

Beyond the expiration window, traders anticipate positioning shifts driven by two key catalysts: hedging activity ahead of MSCI’s January 15 decision—which could remove digital asset treasury firms with crypto holdings exceeding 50% of assets from its indices—and a fresh wave of call option writing.

“Taken together, these flows are likely to boost downside volatility while capping upside potential,” said Maxime Seiler, CEO of digital asset trading firm STS Digital.

Overall market sentiment remains fragile. With losses of around 23%, Bitcoin is on track for its worst quarterly performance since the second quarter of 2022, when the collapse of TerraUSD and Three Arrows Capital shook the crypto industry. Timothy Misir of BRN noted that Bitcoin’s failure to reclaim key technical levels has left the market “trapped in a fragile trading pattern.”

“Overall, volatility remains elevated and market positioning is defensive, but upside potential has not been completely abandoned as markets brace for a turbulent start to the year,” Forster concluded.