The final battle of the Bitcoin price dilemma: Will the expiration of $23.7 billion in Options ignite the year-end market?

By the end of 2025, the Bitcoin market is undergoing a “price deadlock” dominated by derivation. Against the backdrop of cooling inflation and improving macro conditions, the Bitcoin price has bizarrely continued to oscillate between $85,000 and $90,000, with each breakout attempt being suppressed by invisible forces. The core reason lies in an unprecedented “Gamma Flush”: on December 26, Bitcoin options worth up to $23.7 billion are about to expire, accounting for nearly 50% of the entire market structure. The automated hedging operations conducted by market makers to maintain “Delta neutrality” are like a giant hand pinning the price in place. This ultimate year-end liquidation could become the key valve to release the long positions' energy that has been suppressed for a long time and open the market for 2026.

The Invisible Hand: Unveiling the Mathematical Truth Behind Bitcoin's “Stalemate Market”

For many Bitcoin investors, the market trends in the last few weeks of 2025 are confusing and even frustrating. On a macro level, positive news continues: U.S. inflation data is consistently softening, the impact of the Bank of Japan's interest rate hike has been digested by the market, and the political noise of tariff threats is gradually diminishing. Logically, this should be an ideal environment for risk assets to rise. However, Bitcoin's “price tape” seems to be stuck with glue; every attempt to break through $90,000 encounters an invisible wall, while every drop towards $85,000 is mysteriously pulled back. This is not a lack of interest in the market, but rather a mechanical “price lock.”

The key to understanding this phenomenon lies in the stark contrast between the forces of the spot market and the derivation market. Currently, the dominant force determining Bitcoin's short-term price does not stem from the selling pressure of Grayscale's GBTC or the buying power of BlackRock's IBIT, but rather from the book management behavior of options dealers. Data shows that the current gamma power of dealers is as much as 13 times the daily capital flow scale of spot ETFs. Specifically, the average daily capital flow of ETFs is approximately $38 million, while the gamma risk exposure managed by dealers exceeds $507 million. This enormous imbalance of power indicates that the current market is dominated not by long and short “narratives” but by the cold “mathematics” of hedging.

Overview of Bitcoin Year-End “Gamma Wash” Core Data

• Phase One (Appetizer): The options gamma value expiring on December 19 is approximately 128 million USD, accounting for 21% of the total market structure.
• Phase Two (Main Event): The gamma value of options expiring on December 26 is approximately 23.7 billion USD, accounting for nearly 50% of the total market structure.
• Key resistance range: 87,000 to 90,000 US dollars.
• Market Maker Hedging Power vs ETF Flow: Approximately 13:1.
• Important observation point:
  • Support range: 85,000 - 88,000 US dollars.
  • Flip level: $90,616.
  • Long-term target (power law model): around $118,000.

This “stuck market” dominated by derivation has typical characteristics: volatility is systematically suppressed, prices seem to struggle in the mire, and any breakthrough in either direction lacks continuity. For market makers, maintaining price stability before the expiration of options, allowing a large number of out-of-the-money options (especially call options) to expire worthless, thus earning the entire premium, is economically tempting. It is estimated that market makers currently have nearly $250 million in incentives to keep volatility and prices suppressed in the range of $87,000 to $90,000 until after Christmas. This is a sophisticated game around the decay of time value.

Gamma Wash Decoding: How Options Market Makers “Kidnap” Bitcoin Prices?

To break the “Bitcoin price trap”, it is essential to understand the professional concept of “gamma wash”. It all begins with a simple transaction: when investors buy a call or put option on exchanges like Deribit, they are usually met by market makers as counterparties. To avoid exposing directional risk, market makers must maintain a “Delta neutral” position overall. Delta measures the rate of change in the option's price when the price of the underlying asset (Bitcoin) changes.

The key lies in “gamma”, which is the rate of change of Delta and can be understood as “acceleration”. When the price of Bitcoin approaches a certain strike price where there is a concentration of options positions (for example, $90,000), the gamma value will become very high. At this point, in order to maintain Delta neutrality, market makers must conduct accelerated and frequent hedging operations. For example, if the price starts to rise, the Delta of call options will increase, and market makers, as sellers, will have a negative Delta. To hedge, they need to buy Bitcoin in the spot market. However, to offset the new positive Delta generated from buying, they may simultaneously need to sell in the futures market, or more complexly, as prices fluctuate slightly, they must continuously “buy low and sell high” to maintain dynamic balance.

In this high gamma environment, the hedging behavior creates a strong negative feedback loop: price increases trigger selling hedges from market makers, thereby suppressing the upward trend; price decreases trigger buying hedges, thus supporting the downward trend. The result is what we see on the chart, with prices firmly “pinned” in a narrow range, like a stretched rubber band held in place by a hand, unable to snap to either side. “Gamma wash” refers to the moment when all of the market makers' hedging obligations suddenly disappear as these options expire, and this “invisible hand” suddenly releases, potentially causing the suppressed price momentum to snap violently in one direction like a rubber band.

The year-end gamma flush is a carefully orchestrated two-act play. The first act was performed on December 19, with $128 million in gamma expiring, removing the recent shackles that kept Bitcoin suppressed below $88,000, which can be seen as an “appetizer.” However, since the largest concentration of open contracts is on December 26, the real “showdown” has been left for the second act. At that time, up to $23.7 billion in gamma will vanish, and nearly half of the market structure's constraints will be lifted.

Market Outlook: Where Will Bitcoin Head After the Shackles Are Lifted?

When the clock strikes on December 26, after the removal of $23.7 billion in Options gamma, the market will enter a brief “liquidity vacuum” state. Market makers will no longer have the incentive to mechanically sell every rise or buy every dip. At that time, the price of Bitcoin will be driven purely by the real supply and demand relationship in the spot market and the macro bullish sentiment that has been suppressed for weeks.

For traders, there are several key price levels worth closely monitoring before and after the release of the shackles. The primary one is the support range of $85,000 to $88,000. As long as long positions can hold this bottom line during the fluctuations before the expiration of the options, the overall market structure will still maintain a bullish trend. Holding here preserves the “fear of missing out” psychological spark for a potential rebound after expiration. Secondly, the “flip level” of $90,616. Analyst David Eng and others point out that if Bitcoin can effectively break through this threshold after the expiration on December 19 and before the expiration on the 26th, it will be a strong signal indicating that the price shackles of the day have begun to loosen in advance, and the endogenous upward momentum in the market is accumulating.

The longer-term goal points to predictions based on historical models. Bitcoin's “power law model” and other long-term valuation tools show that, after excluding the reverse flow suppression from derivation, the intrinsic gravitational zone for Bitcoin's price is located in the range of $110,000 to $118,000. This means that once the technical suppression is lifted, the momentum for the market to return to this area could be quite substantial. Historical data also supports this narrative of “explosion after suppression.” When large-scale Options expiration coincides with a long period of consolidation, the subsequent trend is often explosive. This is because not only are the shackles lifted, but market makers may also shift from suppressors of the market to followers or drivers of the trend in order to re-establish new positions.

Silent ETF: A Bearish Signal or the Calm Before the Storm?

Another puzzling phenomenon in the current market is the relatively subdued inflow of funds into spot Bitcoin ETFs. Critics argue that if the market is genuinely bullish, why aren't giants like BlackRock and Fidelity making significant purchases at the current price levels? However, the perspective of seasoned analysts is quite different. The fund flows of ETFs, particularly the allocations of institutional investors, are often “reactive” and “momentum-driven.” When the market is stuck due to the gamma effect and lacks a clear trend, it becomes challenging to trigger those large buy orders based on algorithms and trend-following.

Therefore, at this current stage, Bitcoin is able to stubbornly hold key support without the continuous influx of massive funds from ETFs, which is instead seen as a sign of “organic strength.” It indicates that the market's buying power comes from a broader and more conviction-driven holder base, rather than relying solely on external blood transfusions from a few large products. Once the gamma suppression on December 26 is lifted, prices may begin to rapidly move towards $95,000 or even $100,000, at which point, those ETF funds waiting for trend confirmation may likely come back in a vengeful manner, becoming an accelerator for the upward momentum.

Bitcoin Options Greeks: Understanding the Toolbox of Professional Traders

To deeply understand Gamma Flush, it is necessary to have a brief understanding of several key roles in the options Greeks. In addition to Delta and Gamma, there are also Theta (time decay) and Vega (volatility risk). In this event, the core profit logic for market makers is to earn Theta—that is, the decay of the time value of options as the days go by. To safely earn Theta, they must manage Delta and Gamma risks through dynamic hedging. When a large expiration date approaches, Gamma peaks, and the hedging behavior has the greatest impact on prices. Vega relates to volatility, and market makers also hope to suppress volatility (implied volatility decreases) to benefit their position value. This is a highly complex, interconnected risk management system, and the “price stagnation” that ordinary investors see is an external manifestation of this system's efficient operation.

Chain Reaction: What Opportunities Will Altcoins Face if Bitcoin Breaks Through?

Historical experience shows that Bitcoin, as the “benchmark asset” and “total liquidity gate” of the crypto market, has a decisive impact on the entire ecosystem. Once Bitcoin successfully breaks through the cage built by the gamma effect and initiates a clear upward trend, the market's risk appetite will rapidly increase. Capital typically overflows from the relatively stable Bitcoin and rotates into altcoins with a higher “Beta coefficient” to pursue richer returns.

At that time, mainstream altcoins like Solana and XRP, as well as emerging AI and agent concept tokens like Bittensor, are likely to attract new rounds of capital attention and price activity. The breakthrough of Bitcoin will not only unleash its own upward potential but will also open up space for rising sentiment and capital across the entire crypto market. Therefore, paying attention to Bitcoin's trends after December 26 is not only a priority for Bitcoin holders but also an important barometer for all participants in the crypto market.

Trader's Guide: How to Stay Sober in a “Swamp Market”?

In the current “Gamma Quagmire,” it is most important for ordinary traders to maintain patience and discipline. First, high-leverage operations should be avoided in the core fluctuation range of 85,000 to 90,000 USD, as repeated “false breakouts” and “false breakdowns” can easily lead to a double whammy. Second, view December 26 as a potential “mechanism transition day” and closely monitor the price's response to key levels on that day and afterward. Finally, manage your positions and mindset well, understanding that the current price distortion is a temporary structural phenomenon rather than a fundamental shift in market fundamentals.

In summary, by the end of 2025, the Bitcoin market is playing out a classic scenario where the microstructure of the market dominates the macro price. This is not about long-term beliefs, but rather about the distortion and repair of short-term supply and demand mechanisms. When the $23.7 billion gamma lock is released on December 26, the invisible hand that has been suppressing the price will finally let go, and Bitcoin, which has been suppressed for weeks, may demonstrate its true power. For prepared investors, this year-end 'gamma wash' may be the springboard carefully laid out for the 2026 market.