The largest option in Bitcoin history is about to expire! Glassnode: The market is still pricing in downside risks, and BTC’s New Year volatility may break out

The largest Bitcoin option in history is about to expire. Glassnode, an on-chain data analysis agency, pointed out that the market still maintains a low-volatility, defensive structure, and short-term price trends may continue to be limited.
(Preliminary summary: The Bitcoin super cycle is gone? Fidelity warns: 2026 may fall into a cold winter, supporting 65,000-75,000 magnesium)
(Background supplement: Detailed review of the October plunge: the essential reason for the sharp decline in Bitcoin prices)

Contents of this article

On-chain data analysis agency Glassnode yesterday (19th) on X The platform issued a document stating that the largest Bitcoin (BTC) option (option) expiration event in history is about to occur, but the spot price of Bitcoin is still limited to the recent shock range, and there is no clear direction yet. Glassnode believes that this option expiration will not only reset the market position, but may also become an important turning point that affects subsequent price behavior.

Largest $BTC options expiry on deck, and spot is still stuck in its recent range. This thread looks at positioning and volatility signals into the event, and why this expiry could matter for price behavior next. pic.twitter.com/lRtj6c3SxX

— glassnode (@glassnode) December 19, 2025

The market continues to price downside risks

Glassnode analysis pointed out that participation in the Bitcoin options market has cooled significantly over the past month. Overall capital flows have become lighter, indicating that the market's confidence in the short-term upward narrative is weakening. However, investors’ demand for protection against downside risks still exists, and the demand for put options has not disappeared.

From a volatility perspective, implied volatility (IV) declines simultaneously across all expirations. This represents that the market’s demand for short-term hedging and upward leverage is decreasing, and it is expected that Bitcoin price trends will remain within a relatively controlled range. The current at-the-money (ATM) implied volatility is approximately 44%, which has fallen by more than 10 volatility percentage points from the recent high, reflecting that market sentiment is becoming more conservative.

In terms of structural indicators, Glassnode pointed out that the 25-day skewness (Skew) remains in the positive range dominated by puts, which means that the pricing of puts is still higher than that of calls, and the market continues to price downside risks. Such a skewness structure usually does not appear in an environment before the price is about to "break through cleanly".

Option trading is still biased towards defensive operations

In addition, arbitrage and selling volatility strategies are still mainstream in the market. Glassnode said that since the latest Federal Reserve (FOMC) meeting, the 1-week volatility risk premium has continued to be positive, which means that against the background of the convergence of implied volatility before the end of the year, the strategy of selling volatility to earn interest rates (carry) is still attractive and can also help suppress actual price fluctuations.

From the perspective of capital flow, options trading this week is still biased towards defensive operations, with the proportion of put inflows being higher than that of calls, even though the overall trading volume is not outstanding. Glassnode pointed out that the current position structure of market makers is biased toward "multi-Gamma" and will be adjusted through dynamic hedging when prices change. This mechanism may further suppress short-term fluctuations in the spot market before the end of the year.

Market volatility is expected to heat up again in the new year

Finally, Glassnode concluded that with the rapid growth of the Bitcoin options market in the past year, the impact of option expiration and hedging mechanisms on prices has become increasingly critical. This record-breaking expiration event will comprehensively reset market positions and market maker exposure structures. After the position adjustment is completed, market volatility is expected to heat up again in the new year.