Waiting for the Bitcoin Santa Rally This Christmas? Analysts Sound Alarm on Incoming Bears

Key Takeaways

• The long-anticipated Bitcoin “Santa rally” may be delayed until after the New Year.
• Billions of dollars in Bitcoin options expiring on Dec. 26 could amplify volatility.
• Thin holiday liquidity leaves the market vulnerable to sharp, sudden price swings.

As Christmas lights go up and trading desks thin out, crypto markets are entering one of the most fragile periods of the year.

Instead of the seasonal rally many investors had hoped for, analysts warn that Bitcoin and the broader crypto market may remain under pressure well into the holiday break.

Bitcoin is still nursing deep wounds from the Oct. 10–11 sell-off, which erased more than 30% from the market and reset sentiment just as year-end optimism typically begins to build.

With liquidity drying up and major derivatives contracts nearing expiry, the next move may be less about cheer—and more about survival.

Why Bitcoin’s Santa Rally May Have To Wait

According to Singapore-based crypto trading firm QCP Capital , the conditions necessary for a sustained rally are not yet in place.

In a recent market note, the firm pointed to weakening liquidity and widespread position unwinding as key factors keeping Bitcoin range-bound.

Holiday trading typically brings thinner order books as institutional desks scale back activity and traders lock in gains or losses before year-end.

In this environment, even modest trades can push prices sharply in either direction.

QCP noted that open interest across crypto derivatives markets has dropped by billions of dollars in recent sessions, reflecting ongoing deleveraging.

While that reduces systemic risk over time, it also creates the conditions for sudden price “squeezes” as positions are closed unevenly.

That fragility is compounded by the calendar.

On Friday, Dec. 26, a record number of Bitcoin options contracts are set to expire, more than half of Deribit’s total open interest, making the post-Christmas period a potential flashpoint for volatility.

Despite the broader caution, some optimism lingers.

Open interest in $100,000 call options remains elevated, suggesting that a portion of the market is still holding out hope for a late-year push higher.

At the same time, demand for downside protection has eased, pointing to a softening, though not a reversal, of bearish sentiment.

Options Expiry Looms Over Year-End Trading

The sheer scale of the upcoming options expiry could shape price action through the final days of the year.

Roughly $23.7 billion worth of Bitcoin options are scheduled to roll off on Dec. 26, with a heavy concentration of contracts clustered around the $85,000 and $100,000 strike levels.

Market watchers often focus on the so-called “max pain” level—the price at which the largest number of options expire worthless.

For this expiry, that point sits near $95,000, a level that could exert a gravitational pull on spot prices as traders adjust hedges and close positions.

Historically, Bitcoin has seen 5% to 7% price swings during the Christmas period, driven less by new fundamentals and more by thin liquidity and derivatives positioning.

This year appears no different, with QCP warning that tax-loss selling and institutional balance-sheet management could add further turbulence.

“While downside positioning has eased, with open interest in 85,000 Puts drifting lower, the persistence of 100,000 calls suggests residual, if tentative, optimism for a Santa rally. Risk reversals have also softened, pointing to easing bearish sentiment as spot consolidates.”

For now, the market seems content to consolidate rather than celebrate.

A Bitcoin Santa rally isn’t off the table—but with liquidity fading and volatility risks piling up, many traders may have to wait until the New Year for any real holiday surprise.