"Analysis of Bitcoin Option Expiration and Related Market Situations"

On December 27, 2024, the cryptocurrency market ushered in a highly anticipated node. About $14 billion of Bitcoin options are about to expire, and $4 billion of open contracts have entered the in-the-money state. This is undoubtedly a major event, which is very likely to become a key driving force for market volatility in the short term. The entire market is closely watching its subsequent development trend.

From the perspective of the options market, the current situation is that long positions are dominant. However, there are many complex factors in reality. On the one hand, it is currently during the holiday season, and the market's trading volume is at a low level and the activity is poor; on the other hand, the market's leverage is high, which is undoubtedly a potential risk point. In this context, if Bitcoin fails to stabilize at a price above $100,000 on the expiration date, it is likely that there will be a rapid price correction, and then the shorts may regain the upper hand, and the market structure will usher in a major change.

At the same time, if Bitcoin enters a consolidation phase, the flow of funds will also change accordingly. There is a high probability that it will surge towards the cottage market, especially mainstream cottage coins such as Ethereum and Sol. Looking back at history, we can find that whenever Bitcoin adjusts, altcoins tend to show strong rebound capabilities, attracting the attention of many investors and the injection of funds.

In addition, at the macro level, the Federal Reserve recently raised its inflation expectations, partly due to concerns that Trump may impose tariffs. However, Matrixport has a different view. It believes that although inflation expectations have risen, the actual impact may be relatively limited, and looking forward to the future, the inflation problem is unlikely to increase significantly. This situation also provides some room for the Federal Reserve to maintain a dovish policy, and the Federal Reserve's policy direction will have a greater or lesser impact on the cryptocurrency market from a macro level.

In short, the current cryptocurrency market is facing the intertwined influence of multiple factors such as the expiration of Bitcoin options, changes in capital flows, and macro policies, and subsequent developments deserve continued attention.