Bitcoin tests the upper end of its $85,000–$90,000 range with options expiry approaching.

Bitcoin’s year-end options expiry has acted as a brake on volatility, even as macro conditions and broader risk assets have shifted in ways that would typically support higher prices.

For most of December, bitcoin has traded in a narrow $85,000–$90,000 band, lagging a rally in U.S. equities and record highs in gold. The resulting frustration among crypto investors has less to do with fading demand and more to do with the mechanics of the derivatives market.

Those same mechanics now point to a potential move higher once the options expire. After expiry, the path of least resistance appears to be toward the mid-$90,000s, rather than a sustained breakdown below the $85,000 level.

The range-bound price action has been driven by a dense concentration of options exposure around current spot prices. Options grant traders the right, but not the obligation, to buy or sell bitcoin at a specified level. Call options benefit from rising prices, while put options gain value when prices fall. Dealers who write these contracts hedge their exposure in spot and futures markets, with their behavior governed by delta and gamma.

Delta measures how sensitive an option’s value is to a $1 move in bitcoin, while gamma captures how quickly that sensitivity changes as prices move. When gamma is elevated near spot, dealers are forced to trade frequently — buying into dips and selling into rallies — which suppresses volatility.

According to analyst David on X, significant put gamma clustered around $85,000 throughout December effectively created a downside floor, as dealers were compelled to buy bitcoin on price weakness. At the same time, heavy call gamma near $90,000 limited upside moves, with dealers selling into strength. The result was a self-reinforcing range shaped by hedging flows rather than directional conviction.

That stabilizing influence is set to weaken as roughly $27 billion in bitcoin options expire on Dec. 26. As expiry approaches, gamma and delta decay, reducing the need for aggressive dealer hedging.

This expiry stands out for both its size and its bullish skew. More than half of Deribit’s open interest will roll off, and the put-call ratio sits at just 0.38 — indicating nearly three times as many calls as puts. A large share of open interest is concentrated in upside strikes between $100,000 and $116,000.

The “max pain” level — where option buyers incur the greatest losses and sellers typically benefit — is near $96,000, reinforcing the upside bias.

Implied volatility also remains muted. The Bitcoin Volmex implied volatility index is hovering near one-month lows around 45, suggesting traders are not pricing in heightened near-term risk and leaving the market vulnerable to a volatility expansion once options-related pressures ease.