The cryptocurrency market opened the week with Bitcoin caught in a tug-of-war. After a brief surge above the critical $90,000 threshold, the digital asset relinquished its gains. This struggle occurs against a backdrop of gold soaring to unprecedented levels, potentially drawing capital away from crypto. Adding to the volatility is a substantial options expiry scheduled for December 26th.
A Shiny Competitor Dulls Crypto’s Glow
As Bitcoin fluctuated near $89,000 on Monday, the price of gold jumped 2% to a record $4,475 per ounce. Silver also climbed to new peaks. Analysts at ByteTree identify this as a headwind for digital assets, suggesting that “Bitcoin and cryptocurrencies are only likely to shine again once the bull market in precious metals takes a pause.”
This competition manifests in clear trading patterns. Bitcoin consistently gains during Asian and European trading hours only to retreat when U.S. markets open. This repeated sequence has, for days, blocked a sustained breakout above the $90,000 mark.
Divergent Signals: Whale Sales and Derivative Shifts
Market data presents a mixed picture. Large Bitcoin holders, controlling wallets with 10,000 to 100,000 BTC, have collectively sold 36,500 BTC this month—a value of approximately $3.4 billion. Concurrently, recent on-chain analysis indicates investors moved $54 million worth of Bitcoin into cold storage.
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In derivatives markets, the total open interest for Bitcoin futures is approaching $60 billion. Notably, Binance has overtaken the CME as the largest trading venue for these contracts, a potential signal of waning institutional demand. Furthermore, the basis trade, which involves buying spot Bitcoin while selling futures, has seen its profitability diminish significantly.
A $27 Billion Options Expiry Looms
An exceptionally large batch of Bitcoin options, valued at $27 billion, is set to mature on December 26th. This represents more than half of the total open interest on the Deribit exchange. A put-call ratio of 0.38 points to a predominantly optimistic market positioning. The key uncertainty is whether this structure will provide upward momentum or if thin holiday liquidity will trigger sharp price swings.
Meanwhile, Strategy (formerly MicroStrategy) has paused its Bitcoin accumulation strategy. Instead, the corporate holder has bolstered its cash reserves by $748 million. The hiatus in buying from one of the largest institutional purchasers coincides with the current period of sideways price action.
The Stage is Set for a Year-End Breakout
Bitcoin continues to hold above the $85,000 support level but has repeatedly failed to overcome resistance at $90,000. The final days of the year will determine whether the cryptocurrency can escape this narrow trading range. The massive options expiry on December 26th may well act as the catalyst for a decisive move—though its direction remains an open question.
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