Bitcoin and other crypto assets fell steadily again during Monday’s US session, with BTC sliding below $88,000 after climbing above $90,000 and ETH falling back below $3,000.
Some crypto-related stocks are still holding on to gains, led by Hut 8 (HUT), which continues to rise after last week agreeing a 15-year lease for an AI data center with Fluidstack. Shares are up 16% on Monday, helped by an increasing price target from Benchmark’s Mark Palmer.
Other names in the green include Coinbase (COIN) and Robinhood (HOOD), although both are well off session highs as crypto prices have pulled back. The strategy (MSTR) went from a 3% gain to a modest loss at the end of the day.
Expiration of options
The recent highly volatile price action between $85,000 and $90,000 precedes Friday’s record $28.5 billion in BTC and ETH options expirations on crypto derivatives exchange Deribit. That amount represents more than half of Deribit’s $52.2 billion in open interest, noted Jean-David Pequignot, the exchange’s chief commercial officer.
“This end of year marks the culmination of a year defined by institutional maturity and the shift from speculative cycles to a policy-driven supercycle,” Mr. Pequignot said.
At the center of the action, Pequignot continued, is Bitcoin’s $96,000 “maximum pain” level, from which options writers stand to benefit the most. A notable $1.2 billion in open interest is pooled at the $85,000 strike in puts, which could depress spot prices if selling pressure builds. While mid-term call spreads targeting $100,000 to $125,000 remain in play, protective short-term puts have become more expensive, he said.
The spread between buying and selling prices has narrowed from recent highs, but still indicates some caution, Pequignot continued.
Traders appear to be advancing their defensive positions rather than closing them, he said. According to Péquignot, there was a change between December’s $85,000 to $70,000 put spreads and January’s $80,000 to $75,000 put spreads. This suggests that even though the immediate year-end risk is hedged, traders remain cautious about the future.
