I expect a volatile week for Bitcoin due to the massive OpEx on 12/26. The notional value expiring is roughly 8x the previous week.
Max pain is 96k on Deribit. Other exchanges are slightly higher.
Dealer gamma exposure is negative on Monday which should add volatility, so I expect another trip to recent support around 85k. As the week continues, gamma sharply turns positive which should have a dampening effect on price swings. As OpEx approaches, I expect price to move up at an increasing rate due to dealers unwinding hedges into Friday.
Max pain is around 96k, so it should be a magnet for price throughout the week. Hedges unwinding will apply pressure to short liquidations which could cascade with a peak in the 94-96k range.
After options expiration, price should fall sharply IF whales write more covered calls forcing MMs to hedge.
I am short into Monday. Plan to long if it dips, then open a short in the 94-96k range or whatever the top is near EOD Friday with a final target of 72k in the coming weeks/months.
Max pain is 96k on Deribit. Other exchanges are slightly higher.
Dealer gamma exposure is negative on Monday which should add volatility, so I expect another trip to recent support around 85k. As the week continues, gamma sharply turns positive which should have a dampening effect on price swings. As OpEx approaches, I expect price to move up at an increasing rate due to dealers unwinding hedges into Friday.
Max pain is around 96k, so it should be a magnet for price throughout the week. Hedges unwinding will apply pressure to short liquidations which could cascade with a peak in the 94-96k range.
After options expiration, price should fall sharply IF whales write more covered calls forcing MMs to hedge.
I am short into Monday. Plan to long if it dips, then open a short in the 94-96k range or whatever the top is near EOD Friday with a final target of 72k in the coming weeks/months.
ملاحظة
Chart showing that options hedging as the current primary driver of price:ملاحظة
This trade idea is primarily based on price mechanics with little consideration for traditional TA or macro data. Since the method and extent of hedging is speculative, data should be monitored for confirmation.Assuming price moves up toward 94k+, the following two data points should be monitored:
1) Futures Open Interest
If futures OI is flat to down while price is rising, it indicates that the rally is mostly based on a combination of hedges unwinding and short covering/liquidations, which makes a sharp pullback more likely. If, futures OI moves up with price, it could indicate a sustainable rally or consolidation at the higher level.
coinglass.com/pro/futures/Cryptofutures
2) Options Open Interest
A spike in call options for expiries beyond 12/26 may indicate that whales are repeating the cycle of selling covered calls which should put downward pressure on price as MMs buy/hedge. Since MMs typically delta hedge in bands, the strikes will be important. The closer the strike, the more initial downward pressure due to higher delta.
coinglass.com/pro/options/OIExpiry
ملاحظة
The initial dip did not materialize but that was based less on data and more on the typical Asia/London pump, NY selloff at the open routine. Given negative gamma for the day, I assumed it would be a larger selloff than normal but that was incorrect.Shorts closed. Longs now opened (IBIT 01/09/2026 53.00 C)
ملاحظة
GEX and max pain have moved since the original post so I have updated the chart. Also, I shouldn't have automatically assumed such a bearish drop after 12/26 because it's influenced by how 12/26 closes. Max pain suggests an initial pull higher into Friday, then lower after Friday but we need to see how it breaks to position for that move.
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