Bitcoin Price Remains Steady in $87K–$89K Range as $1.85B Options Expiry Approaches

Bitcoin is currently trading in a narrow band as investors exercise caution leading up to a significant options expiry, with both spot and derivatives data reflecting a lack of clear directional sentiment.

Key Takeaways

Bitcoin is trading in a tight range of $87K–$89K as traders prepare for a $1.85 billion options expiry.
Market activity has slowed, with a significant drop in both spot and derivatives trading volumes.
Current sentiment is cautious, and the price remains near important resistance and support levels.
On-chain data suggests a transformative period for Bitcoin, balanced between bullish and bearish market phases.
Technical indicators show sideways movement, with potential for a significant price shift following the options expiry.

Chart showing Bitcoin price consolidate

At the time of writing, Bitcoin's price stands at $88,326, showing a slight increase of 0.6% in the last 24 hours. Over the past week, the price fluctuated between $86,979 and $90,064, with neither buyers nor sellers gaining the upper hand. Looking back, Bitcoin finished the year 6.7% lower and is still approximately 30% below its peak of $126,080 reached in October.

Market activity has slowed down noticeably. Spot trading volume for the past 24 hours dropped to $21 billion, which is a decrease of over 40% from the day before. Similarly, derivative trading volume in futures decreased by 39% to $32 billion, while open interest rose slightly by 0.6% to $55 billion. This combination indicates that many traders are holding onto their existing positions and not opening new ones, a common scenario before a significant options expiry.

Options Expiry Impacts Short-Term Market Confidence

Bitcoin Bitcoin btc1.51% options worth a notional value of $1.85 billion are set to expire at 8:00 a.m. UTC on Jan. 2, according to data from Deribit. The put-to-call ratio is at 0.48, and the maximum pain level is approximately $88,000. Additionally, Ethereum eth1.61% options valued at $390 million will also expire, with a max pain price of $2,950.

Options enable traders to reserve the right, without obligation, to buy or sell Bitcoin at a specified price before a predetermined date. Call options benefit when prices rise, while put options profit when prices decline. As the expiration date approaches, many traders alter or liquidate their positions, which can influence short-term price movements.

Currently, the data shows a somewhat optimistic outlook, but it’s not strong enough to increase Bitcoin's price significantly above the $88,000 level. Prices remain close to critical strike levels, open interest remains steady, and trading activities are dwindling. This situation typically leads to sideways trading until the options expire. Post-expiry, the market may experience increased movement as these positions are adjusted.

On-Chain Indicators Suggest Market Transition

A recent analysis from CryptoQuant contributor Yonsei_dent, dated Jan. 2, adds to the cautious sentiment. The metric called Bitcoin’s Supply in Profit, which measures how much of the circulating supply is held at a profit, currently sits at 68.85%. This positions the market between distinct bull and bear phases.

Historically, readings below 55% indicate deeper bear markets, while those above 80% reflect strong bull runs. Bitcoin dropped below the 80% threshold in October and has continued to trend downwards. Such a gradual decline, rather than a sharp drop, often signifies a late-cycle phase.

The duration of this metric staying at current levels is crucial. A rebound above 75–80% would strengthen the argument for potential upward movement, while a prolonged period around 70% has historically raised concerns for a broader downturn.

Technical Analysis of Bitcoin’s Price

Currently, Bitcoin’s price trend remains sideways to bearish. The overall pattern shows lower highs and lower lows, but recent price activity has transitioned into a tight consolidation instead of a sharp descent.

Bitcoin price holds $87K–$89K range

The narrowing of the Bollinger Bands indicates reduced volatility. The price hovers in the lower half of the bands and is under pressure near the middle band. This setup typically precedes a significant movement, although it does not indicate the direction of the breakout.

The relative strength index (RSI) is around 48, which is close to neutral. Momentum has stabilized following an oversold period, but buyers have yet to exhibit significant strength.

Support levels are established between $86,000 and $87,500, where the price has previously bounced. Resistance is found within the range of $89,500 to $91,000. A firm daily close above this resistance zone could signal recovery, while a dip below support would emphasize the downtrend.