Bitcoin’s December decline puts pressure on derivatives markets
Bitcoin dropped under $88,000 on Sunday morning, which I think really dampened the weekend trading mood. The whole “Santa Rally” concept that people talk about this time of year seems to be fading fast. December is currently showing a 1.63% decline as of December 7th, and the fourth quarter of 2025 is down 22.01% so far. These numbers might change as the month progresses, but they’re not exactly encouraging.
Looking at the futures market, total bitcoin futures open interest sits at 637,700 BTC, worth about $56.82 billion. That’s down 1.41% over the past day. What this suggests to me is that traders are quietly reducing their exposure before the coming week. CME leads with 124,440 BTC, though its open interest slipped 0.61% too. Binance follows closely with 121,640 BTC, showing a small 0.21% daily decline.
Options markets show conflicting signals
The options side of things is equally interesting, though perhaps a bit confusing. Calls continue to dominate open interest at 64.16%, with 333,190 BTC in call exposure versus 186,160 BTC in puts. Over the last day, call volume held 55.56% while puts captured 44.44%. This tells me traders are still willing to bet on upside moves, just not with the same conviction they might have had earlier.
Deribit’s open interest shows contracts from $100,000 to $118,000 still leading the rankings, with the $100,000 strike commanding 17,774 BTC. But here’s the thing – short-dated volume is clustering around the $87,000 to $91,000 range. This reflects hedging pressure as traders adjust to bitcoin’s current price action, which has been, well, fairly sleepy.
Max pain levels paint a cautious picture
Max-pain levels across major options venues show Deribit anchored around $90,000 as notional value spikes into the December 26 expiry. On Binance, max pain drifts into the mid-$110,000 range for longer-dated contracts, even though December positioning still hovers just under the six-figure mark. OKX clusters between $90,000 and $93,000.
What’s interesting about max pain levels is that they remain well above spot prices. But the reality of current market conditions – and some poorly timed leverage – isn’t exactly helping bullish traders achieve their holiday goals.
Historical context adds perspective
Looking back at historical data provides some context. December returns have been notoriously volatile over the years – from +46.92% in 2020 to -36.57% in 2018. This particular December seems to be leaning toward the more disappointing end of that spectrum.
Despite all these cautionary signals, derivatives traders remain resilient. High call open interest at optimistic strike prices means there are still plenty of traders hoping for significant upside. They’re just being more cautious about it now.
With bitcoin wobbling under $88,000, the once-anticipated “Santa Rally” appears increasingly unlikely. Perhaps it was always more of a seasonal rumor than a reliable pattern. The market seems to be telling us that December might bring more coal than candy canes this year, at least for bitcoin traders.
