Bitcoin Poised for Post-Christmas Surge As $327 Million Gamma Release Looms

1. Bitcoin remains trapped between $85K support and $90K resistance ahead of a $327M gamma expiry.
2. December 26 expiry could remove dealer-imposed price constraints, opening the path for sharp moves.
3. The key flip level at $89,180 will likely decide the next directional trend for Bitcoin.

Bitcoin continues to trade in a compressed range between $85,000 and $90,000, reflecting both technical and derivative market dynamics. Analyst CryptoELlTES indicates that Bitcoin is in a cycle called Wyckoff and is moving from accumulation to markup and could be going into a distribution phase.

However, prices are flat when at the top of a cycle with low volatility despite the forces at work. According to the analyst, at this stage, it is normal for prices to be flat, as the movement of major market players determines the next market movement.

Source: X

At the current level, it’s the rules of dealer hedging that are keeping the market in check. There’s also $50.7 million of call gamma at $90,000, so they are covering buy orders to hedge their short positions. On the other hand, there’s also a floor provided by $78.9 million of put gamma at $85,000. In other words, it’s a “gamma trap” keeping Bitcoin around $88,119.

$327 Million Gamma Expiry Set to Impact Market

The major event is the gamma expiry of $327 million on the 26th of December. It comprises about 60% of the market’s gamma. As the gamma expires, the spot market won’t be stabilized by the dealer hedges. Hence, the spot flows will be able to move the price more quickly.

As said by expert David, the price of Bitcoin won’t face any resistance after expiration due to the call wall of $90K after its expiry. Dealers will begin to buy instead of selling if the underlying hits the level of the gamma flip at $89,180, and hence it might see a rise to $94,000-$98,000 since there’s less liquidity in regions with large derivative contracts.

Two-Stage Market Outlook for Bitcoin

The coming 48 hours could span two phases. First, Bitcoin could remain in a small range of $87,000 to $89,500 as traders adjust to the gammas. Secondly, after December 26, the expiry of the $327 million in gammas will trigger stage two.

Source: X

However, if Bitcoin remains above $89,180, then a smooth increase to $100,000 is also possible. On the other hand, if it breaks below $85,000, then selling pressure is likely to accelerate since gamma is negative, meaning more people are exposed to Bitcoin’s volatility. Patience is key; instead of trying to trade ranges at these low levels, investors might simply ride out these moves.

Also Read: Bitcoin Daily Candle Shows Indecision with $93,000 Target in Sight