Traders and analysts are closely monitoring the upcoming dynamics in the cryptocurrency market as the U.S. stock market faces its quarterly “triple witching” event, slated to occur in the near future. This event involves the simultaneous expiration of stock index futures, index options, stock options, and single-stock futures, typically leading to heightened volatility. Insights suggest that while the immediate impact on Bitcoin may be indirect, there could be significant consequences stemming from shifts in risk appetite across asset classes.
Currently, Bitcoin is trading flat, remaining below the $90,000 mark for the third consecutive day, according to data from CoinGecko. The market is particularly sensitive this week due to a combination of macroeconomic factors, including the latest U.S. nonfarm payroll data and a critical monetary policy meeting by the Bank of Japan. These events are driving liquidity and risk assessments among traders, contributing to a cautious trading environment.
Tim Sun, a senior researcher at HashKey Group, notes that global markets are currently facing several overlapping factors. He explained the potential ripple effect of the derivatives expiry, which may spark position adjustments in equities and, in turn, impact crypto assets like Bitcoin, known for their high beta. Derek Lim, head of research at crypto market-making firm Caladan, elaborated on the “transmission mechanism” of risk appetite, highlighting Bitcoin’s strong correlation with the Nasdaq. This correlation is increasingly notable, especially with rising institutional participation.
Historical patterns around previous triple witching events show mixed reactions in the cryptocurrency market. While a March witching event triggered a sharp decline in crypto, a June event resulted in a slight downturn followed by a month of consolidation. In contrast, the September witching had a more subdued impact. Currently, a put-call ratio near 1.10 signals a defensive stance among traders, coupled with inconsistent flows in exchange-traded funds and diminishing holiday liquidity, which adds to the overall pressure.
This week, compounded by conflicting macro signals, has led to increased caution. While a recent rise in U.S. unemployment rates has bolstered expectations for potential rate cuts in 2026, this optimism is countered by concerns regarding the Bank of Japan’s tightening measures, which may trigger capital outflows from higher-risk assets like Bitcoin.
However, the focus is shifting toward a more crypto-specific event scheduled for December 26, where over $13.3 billion in Bitcoin options are set to expire. With a significant portion of open interest clustered around a “max pain” price of $100,000 to $102,000, market analysts are dubbing this expiry a pivotal moment for Bitcoin. Lim asserts that this event may have more substantial implications for the crypto market than the December 19 stock derivatives expiry.
Sun emphasizes that institutional investors are currently engaged in a year-end portfolio rebalancing phase, during which some may seek to reduce their risk exposure and lock in profits. This could result in temporary selling pressure and amplify volatility across risk assets, including Bitcoin.
Traders are preparing for what could be a day of erratic trading, particularly during the late U.S. session when volatility is expected to peak. Analysts suggest that while the immediate effects of the triple witching might be muted, the real test for Bitcoin’s price will arrive with the December 26 options expiry. Interestingly, optimism persists among traders on prediction markets, with a recent surge in confidence showing a 68% chance that Bitcoin will rise to $100,000 rather than dip to $69,000, an increase from just 60% the previous day.
