Matrixport Research: After months of caution, Bitcoin has entered a phase of structural game theory.

Since mid-October, Bitcoin has been declining, and market sentiment has clearly turned cautious. With the market once again discussing the "four-year cycle," some traders are extrapolating that 2026 may still be a period of pressure. However, recent structural changes suggest the market is entering a new phase, distinct from a one-sided downward trend.

Over the past few months, Bitcoin has been trading in an environment of converging volatility, deleveraging, and a lack of risk appetite, putting sustained downward pressure on its price. However, changes in the market's internal structure are evident in derivatives positioning, ETF flows, and key technical indicators. With the expiration of the largest Bitcoin options coin in history approaching, strike price distribution is becoming a crucial window into market pressures and potential opportunities.

Low volatility and risk mitigation go hand in hand: Markets expected to remain range-bound by year-end.

In recent months, Bitcoin's implied volatility has been converging, and the price is likely to remain within the $70,000 to $100,000 range. On the one hand, there is a lack of upward catalysts in the short term to drive the price significantly out of this range, and event risks are relatively limited; on the other hand, the Federal Reserve's dovish stance may not be as dovish as the market previously expected, limiting the overall upward momentum of risk assets.

Meanwhile, Bitcoin, which had significantly underperformed other major assets, was more likely to be used by multi-asset investors as a "tax-loss sell" tool at the end of the year to offset realized gains in other markets, thus putting additional selling pressure on the price. Coupled with the impact of the sharp decline in early October, many trading teams were still digesting previous losses and had limited willingness to expand their risk exposure before the end of the year. Against this backdrop of limited risk appetite, adding positions and allocating funds became more cautious, and the market as a whole maintained a low-volatility, range-bound state.

Options Expiration and Risk Budget Reset: A Structural Inflection Point Approaching

On December 26, 2025, Bitcoin will see its largest options expiration in history, with approximately $17.2 billion in call options and $6.2 billion in put options settling. Looking at the strike price distribution, call options are mainly concentrated above $100,000, making it difficult to reach in the short term. In contrast, a considerable amount of open interest in put options is concentrated around $85,000, making this area more likely to become a range for price fluctuations around expiration.

Historical experience shows that the market is typically more conservative at the end of the year, while the reversal of sentiment often happens faster than expected after the new year, as funds are reallocated and risk budgets are restored. The current technical structure is also changing: downward momentum is slowing marginally, but a clear consensus on upward movement has not yet been formed. Against this backdrop, the market may be gradually shifting from a phase where "downside risk is dominant" to a phase where "downside is limited, and upward movement still needs catalysts." After options expire, position pressure is expected to ease in stages, and coupled with potential ETF fund inflows and a recovery in risk appetite in January, there is room for improvement in market sentiment.

Overall, while 2026 may still present challenges for long-term unilateral bullish positions, the focus of research has shifted to tactical opportunities arising from the gradual improvement in risk-reward structures. Bitcoin's underperformance compared to other major assets for several weeks, coupled with the year-end to beginning-of-year calendar transition, suggests that such opportunities may emerge earlier than the market anticipates. The December 26th options expiration event is significant not merely for the mechanical settlement of the contracts themselves, but rather because market participants often begin to reposition themselves in preparation for January's capital inflows and risk appetite recovery. This phase may be becoming a crucial window for observing structural changes and sentiment inflection points.

The above viewpoints are from Matrix on Target. Contact us to obtain the full Matrix on Target report.

Disclaimer: Investing in the market involves risks; please exercise caution. This article does not constitute investment advice. Digital asset trading can be extremely risky and volatile. Investment decisions should be made after careful consideration of your individual circumstances and consultation with a financial professional. Matrixport is not responsible for any investment decisions made based on the information provided in this content.