Bitcoin investors are preparing for “Witching Friday” tomorrow, December 18, when billions of options are set to expire in what could be a very volatile weekend rollercoaster for the markets.
According to Bloomberg, some $23 billion in contracts are set to expire on Deribit, the largest Bitcoin exchange.
Here’s what you need to know.
What is “Witching Friday”?
“Witching Friday,” also known as “triple witching” or “triple witching hour,” refers to the last hour of the stock market session on the third Friday of March, June, September, and December. This is when three types of securities expire simultaneously, often leading to increased volatility.
These securities are stock index futures, stock index options, and stock options (plus single stock futures), depending on Decrypt.
These “triple witching” days often generate more trading activity, therefore more volatility, or larger swings, since contract expiration triggers the purchase or sale of the underlying security, according to Investopedia.
“These days of witchcraft simply indicate higher volume and the ability to inflict maximum pain if certain thresholds are reached,” Michael Terpin, author of Bitcoin Supercycle and CEO of Transform Ventures, says Fast business. “This by no means guarantees lower prices. But with the constant drumbeat of fear in the market, including Japan’s rate hike decision, the chances of a lower low are increasing.”
Where is Bitcoin currently?
Heading into Friday’s event, Bitcoin continues to fall, as it has in recent weeks, triggered in part by the Federal Reserve’s recent interest rate cut of 25 basis points on December 10, and compounded by uncertainty over the long-term macroeconomic environment ahead, potential rate hikes from the Bank of Japan, and fears of higher U.S. inflation in 2026.
As of Thursday afternoon, at the time of writing, the digital cryptocurrency (BTC) was trading down almost 1%, falling well below $90,000, at $85,184.
It’s part of an overall decline in the crypto market that also saw the closely watched digital asset XRP fall almost 2%, hovering around $1.82 per token on Thursday, while Ethereum (ETH) remained stable and was trading at $2,802 at the time of writing.
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