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Bitcoin has remained unusually calm throughout December, trading in a tight range despite strong gains in global risk assets. BTC to PKR is currently around PKR 24.3 million, as BTC hovers near $87,300, with year-end options expiry playing a major role in suppressing price volatility. Market mechanics now suggest that this period of consolidation may soon end, with the balance of probabilities favoring an upside move.
Bitcoin has spent almost the entire month locked between $85,000 and $90,000, frustrating investors as U.S. equities surged and gold reached record highs. Analysts say the lack of movement is not due to weak demand, but rather the influence of derivatives markets, particularly options positioning on Deribit.
This range has been mechanically enforced by dealer hedging. Price dips near $85,000 have repeatedly attracted buying, while rallies close to $90,000 have faced consistent selling pressure.
Options contracts allow traders to buy or sell bitcoin at a predetermined price. According to market data, there is a heavy concentration of both call and put options clustered around current price levels.
“When gamma is high and close to spot, dealers are forced to buy and sell frequently, which naturally suppresses volatility,” noted derivatives analyst David, explaining why Bitcoin has remained range-bound.
Large put option exposure near $85,000 has acted as a downside floor, while heavy call exposure near $90,000 has capped upside moves. This dynamic has created a self-reinforcing trading band driven more by hedging needs than investor conviction.
The situation is set to change on December 26, when nearly $27 billion worth of Bitcoin options expire on Deribit. More than half of total open interest will roll off, significantly weakening the stabilizing effect of gamma hedging.
Importantly, the expiry carries a strong bullish bias. The put-call ratio stands at just 0.38, meaning call options heavily outnumber puts. Most open interest is concentrated at upside strike prices between $100,000 and $116,000, while the so-called “max pain” level sits near $96,000, reinforcing expectations of higher prices.
Despite the large expiry, implied volatility remains subdued. The Bitcoin Volmex implied volatility index is hovering near one-month lows around 45, signaling that traders are not pricing in elevated short-term risk.
Analysts believe that once the expiry passes and hedging pressure fades, Bitcoin is more likely to resolve higher toward the mid-$90,000 range rather than breaking below the $85,000 support zone.
