Since mid-October, Bitcoin has continued to decline, with market sentiment clearly turning cautious. As the market once again discusses the "four-year cycle," some traders project that 2026 may still be a phase of pressure. However, judging from recent structural changes, the market is entering a new phase different from a one-sided decline.
Over the past few months, Bitcoin has been operating in an environment of converging volatility, deleveraging, and a lack of risk appetite, with prices under continuous pressure. However, from the perspective of derivatives positions, ETF fund flows, and key technical indicators, the internal structure of the market has already changed. As the largest Bitcoin options expiration in history approaches, the distribution of strike prices is becoming an important window to observe market pressure and potential opportunities.
Low Volatility and De-risking in Parallel: Year-End Market Maintains Range-Bound Volatility
In recent months, Bitcoin's implied volatility has continued to converge, with prices likely trading within the range of $70,000 to $100,000. On one hand, there is a short-term lack of catalysts that could drive the market significantly away from this range, and event risks are relatively limited. On the other hand, the Federal Reserve's dovishness may not meet previous market expectations, limiting the overall upward momentum of risk assets.
At the same time, Bitcoin has significantly underperformed other major assets and is more likely to be used as a tool for "tax-loss selling" by multi-asset investors at year-end to offset realized gains in other markets, thereby creating additional selling pressure on prices. Coupled with the impact of the sharp decline in early October, many trading teams are still digesting earlier losses and have limited willingness to expand risk exposure before the end of the year. Against the backdrop of constrained risk appetite, increasing positions and capital allocation have become more cautious, and the market as a whole maintains a state of low volatility and range-bound fluctuations.
Options Expiration and Risk Budget Reset: Structural Inflection Point Window Approaches
On December 26, 2025, Bitcoin will witness the largest options expiration in history, with approximately $17.2 billion in call options and $6.2 billion in put options concentrated for settlement. Judging from the distribution of strike prices, call options are mainly concentrated above $100,000, which is difficult to reach in the short term. In contrast, a considerable amount of open interest in put options is gathered around $85,000, making this area more likely to become a range of repeated price games around expiration.
Historical experience shows that the year-end market is usually more conservative, but after entering the new year, with capital reallocation and risk budget recovery, the speed of sentiment reversal often exceeds expectations. The current technical structure is also changing: downward momentum is marginally slowing, but upward momentum has not yet formed a clear consensus. Against this backdrop, the market may be gradually shifting from "downside risk dominance" to a gameplay stage of "downside limited, upside still requires catalysts." After the options expiration is completed, position pressure is expected to be released in stages. Coupled with potential ETF fund回流 and risk appetite repair in January, there is room for improvement in market sentiment.
Overall, although 2026 may still be challenging for long-term one-sided long positions, the research focus has begun to shift to tactical opportunities with gradually improving risk-reward structures. Bitcoin's underperformance against other major assets for several consecutive weeks, combined with the calendar switching effect from year-end to the beginning of the year, means that related opportunities may appear earlier than market expectations. The significance of the December 26 options expiration event does not lie in the mechanical settlement of the contracts themselves, but in the fact that after this node, market participants often begin to reposition in advance for January's fund回流 and risk appetite repair. This stage may be becoming an important window to observe structural changes and sentiment inflection points.
The above views are partly from Matrix on Target, contact us to obtain the full Matrix on Target report.
Disclaimer: The market is risky, and investment requires caution. This article does not constitute investment advice. Digital asset trading can be extremely risky and volatile. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. Matrixport is not responsible for any investment decisions based on the information provided in this content.
