Volatility Instead of a Santa Rally: December 26 Bitcoin Options Expiry, Max Pain at 96K, and 2025 Liquidity Scenarios

In the holiday market, equities enjoyed a Santa rally, but Bitcoin failed to break through the $90,000 resistance and slipped. Heading into the 5 p.m. options expiry on December 26, the Max Pain level is concentrated around $96,000. If current buying momentum weakens, downside pressure from institutional delta-hedging could intensify. Near-term risks are clear, yet as we approach 2025, a backdrop of expanding liquidity alongside an economic upturn could actually increase Bitcoin’s medium- to long-term upside potential.

December 26 Options Expiry: Max Pain at 96K and Delta-Hedging Risk

In this expiry, the Max Pain price near $96,000 is the zone where option buyers (primarily retail) suffer the most losses and option writers (mainly institutions) maximize profits. If price does not quickly recover above $90,000, institutions may shift hedges to the downside to offset losses, which could broaden short-term declines. With liquidity thin during the holidays, daily swings of $5,000–$6,000 can recur, increasing volatility risk for altcoin futures holders.

Short-Term Price Levels: Double Bottom, Key Support, and the Final Capitulation Zone

There is still room for another leg lower from the recent trough to confirm a double bottom around $80,000. We identify the $74,000 area—the prior all-time high zone and a key supply region in this cycle—as strong support, while a final capitulation could appear in the low $70,000s. In contrast, a deep slide into the $50,000s looks less likely when considering the 200-week moving average and the current liquidity environment. Historically, the 200-week moving average has served as a major bottoming signal; barring extraordinary shocks such as the pandemic, Luna, or FTX, the probability of a sustained break below that band appears limited.

2025 Liquidity Regime and Bitcoin: Data, Logic, and Outlook

Macro data currently show a combination of solid growth and easing inflation. U.S. GDP growth remains in the 4% range (recent estimates around 4.3–4.4%), headline CPI has fallen to lower levels, and core PCE has printed below forecasts, signaling disinflation. This combination is likely to lead to looser liquidity conditions, and as the Federal Reserve accelerates purchases of short-dated Treasuries, perceived market liquidity could improve faster than expected. We also interpret copper’s attempt to break long-term resistance as an early signal of a cyclical upturn. When liquidity expansion and economic acceleration unfold simultaneously, Bitcoin tends to react more sensitively than other risk assets.

Against this backdrop, we see potential for Bitcoin to exceed $140,000 next year, and we consider a peak above $300,000 plausible in the next cycle. However, the primary rally should strengthen when liquidity inflows become visible, so rather than rushing into sharp short-term rebounds, we recommend monitoring the timing of the liquidity turn as the big-picture driver.

Altcoin Strategy: Major-Cap Focus, Preconditions for a Parabolic Move, and the RWA Theme

Selectivity and focus are essential for altcoins. Without a parabolic advance in Bitcoin, an altseason is structurally constrained, so prioritize major-cap altcoins, and treat small and mid-caps as unsuitable for passive long-term holds unless employing nimble trading. From a long-term investment perspective, we prefer a Bitcoin-centered approach. With the ETH/BTC ratio in a medium-term downtrend, a Bitcoin-heavy allocation appears advantageous for long-term holding.

On themes, we view RWA (tokenization of real-world assets) as a structural trend, with more meaningful benefits likely in the next cycle as regulatory clarity improves and institutional participation accelerates. Potential beneficiaries include Ondo (ONDO) and Chainlink (LINK), which have notable ties to large asset managers. Still, we caution against premature expectations and look for regulatory progress and verifiable institutional inflows as triggers.

Crypto-Related Equities and Events: MSTR, MSCI, and the Paradox of ‘Sell the Rumor, Buy the News’

Crypto-related equities often trade like levered derivatives on Bitcoin and Ethereum, so traditional valuation frameworks apply poorly. Regarding MicroStrategy’s potential exclusion from an MSCI index (decision slated for January 15), we see a somewhat elevated probability of removal but also note that part of the risk may already be priced in, leaving room for a “bad-news-is-over” relief rally on the day of the announcement. The elimination of uncertainty can invite dip buying—a familiar paradox.

Execution Guide: Risk Management and Action Plan for a Volatility Window

In the near term, the overlap of the December 26 options expiry and a holiday liquidity gap may keep volatility elevated. A reclaim of $90,000 could be a critical inflection. Even if weakness deepens, there is a high likelihood of a sharp countertrend rally. If position adjustments are needed, it is preferable to pre-plan and rebalance risk into those bounce phases. Over the longer term, maintain a staged buy-and-sell discipline centered on Bitcoin, selectively focus on major altcoins, and assess trading capability with clear, unemotional realism.

Wrap-Up: Key Points

The December 26 options expiry and the 96K Max Pain are key variables that can dictate near-term order flow. Delta-hedge-driven downside and thin holiday liquidity can elevate short-term volatility, but a 2025 environment combining expanding liquidity and cyclical strength is constructive for Bitcoin. We are watching the $74,000 zone as pivotal support while maintaining a Bitcoin-centric long-term strategy, selective exposure to major alts, and ongoing work on the long-term RWA theme.