Bitcoin (BTC) and other cryptocurrency assets experienced a steady decline throughout the U.S. session on Monday, with Bitcoin falling below the $88,000 mark after briefly surpassing $90,000 earlier in the day. Ethereum (ETH) also retreated, slipping back below the $3,000 threshold.
Despite the downturn in crypto prices, several crypto-related stocks managed to maintain their gains. Hut 8 Mining Corp. (HUT) led the charge, seeing a notable 16% increase in share price on Monday. This surge followed the company’s recent announcement of a 15-year partnership with Fluidstack to operate an AI data center, buoyed further by an increased price target from Benchmark’s Mark Palmer. Other stocks showing positive movement included Coinbase (COIN) and Robinhood (HOOD), although both saw their session highs recede as the crypto market continued to retrench. In contrast, MicroStrategy (MSTR) saw a swing from a 3% earlier gain to a modest loss as the trading day progressed.
This fluctuation in Bitcoin prices comes ahead of a significant options expiration set for Friday, with a record $28.5 billion in options contracts for both BTC and ETH on crypto derivatives exchange Deribit. This figure accounts for over half of Deribit’s total open interest of $52.2 billion. Jean-David Pequignot, the exchange’s chief commercial officer, noted that this end-of-year expiration encapsulates a year marked by institutional maturity and a shift away from speculative trading cycles toward a more policy-driven supercycle.
Pequignot pointed out that Bitcoin’s $96,000 “max pain” level is pivotal, indicating the price point where option writers would benefit the most. Additionally, a substantial $1.2 billion in open interest sits at the $85,000 strike in put options, which could exert downward pressure on spot prices if selling intensifies. While there are still mid-term call spreads targeting $100,000 to $125,000 in play, short-term protective puts have seen an increase in cost, indicating a more cautious market outlook.
The disparity between pricing for call and put options has decreased from previous highs, but it still reflects a level of caution among traders, according to Pequignot. Many appear to be rolling their defensive positions forward instead of liquidating them. Specifically, there has been a shift from December put options in the $85,000 to $70,000 range to January put spreads between $80,000 and $75,000. This transition suggests that while traders are managing immediate risks as year-end approaches, they are remaining vigilant regarding potential challenges in the near future.
