The Bitcoin options market is now fixated on the Christmas week. In a post on Thursday, David Eng, a managing partner in the energy sector, argued that the next eight days—from December 19 to December 26—could define Bitcoin’s near-term cycle. This isn’t due to a major news event or a sudden rush into ETFs, but because a significant amount of dealer gamma exposure is set to expire in two batches.
At the time of writing, Bitcoin was trading around $86,928, having fluctuated between roughly $84,461 and $89,230 during the day. Eng’s analysis is straightforward and typical of options traders: the market is being mechanically held in place, and that pressure has an expiration date.
“The narrative isn’t just about tomorrow. We are staring down the barrel of a ‘Double-Barreled’ Liquidity Event that will wipe 67% of the entire derivatives board clean by December 26th,” Eng wrote. “Bitcoin is trading at $88,752, deep in the -25% Value Zone (Trend Value: $118k). The spring is coiled, but two massive structural weights are holding the lid down.”
In his view, those “weights” are two expiries with significant gamma attached: roughly $128 million tied to December 19 (21% of the total he tracks) and another $287 million on December 26, which he calls the “boss level” ceiling. He labels the combined $415 million an upcoming “Gamma Flush,” suggesting that once it clears, the hedging pressure that has been suppressing the spot price should ease.
The practical effect is less mysterious than it sounds. When dealers hold substantial gamma around a narrow range of strike prices, their delta-hedging can reduce volatility and keep the spot price hovering near certain levels until that exposure decays or expires. This creates the familiar feeling among traders that the market is stuck.
Eng’s framework highlights specific price levels: $85,000–$90,000 as the “mud” zone where hedging pressure repeatedly pulls the price back, and $90,616 as a key level to watch around the December 19 expiry.
“Stage 1: The Spark (Tomorrow, Dec 19) — $128 Million in Gamma expires tomorrow (21% of total). This is the ‘Appetizer.’ It removes the immediate suppression pinning us below $90k,” he wrote. “Watch the $90,616 flip level. If we clear this, the intraday shackles fall off.”
However, Eng is more focused on the following week. “Stage 2: The Floodgate (Next Friday, Dec 26) — $287 Million in Gamma expires next week,” he continued. “A staggering 46.2% of all dealer gamma exposure sits on this single date… Dealers have a quarter-billion-dollar incentive to keep volatility crushed and price pinned near $85k-$90k through Christmas to harvest this premium.”
The core idea is that the period before December 26 is like “thick mud,” while after that date, the market could move more freely. “When you combine these two dates, $415,000,000 of gamma—two-thirds of the entire market structure—evaporates in the next 8 days,” Eng wrote. “Before Dec 26: The market is fighting through thick mud… After Dec 26: The mud dries up. The suppression mechanism is gone. The Power Law gravity ($118k) takes over without the dealer counter-flow.”
He also highlighted a notable ratio that has been discussed in derivatives circles this year: the strength of dealer mechanics compared to ETF demand. “Dealer Gamma forces are currently ~13x stronger than ETF Flows,” he wrote. “Dealer ~$507.6M, ETF ~$38M. This is why the market is obeying the technical gamma levels ($85k/$90k) and ignoring the ETF volume.”
When critics questioned whether “$287 million” is even significant, Eng clarified what the figure represents—and what it does not. “The $287M figure refers to dealer gamma exposure, not the notional value of the options. It’s a measure of the hedging pressure, not the size of the bets themselves.”He clarified that the key metric is gamma exposure (GEX), not the total size of options. GEX measures the amount Bitcoin dealers might need to buy or sell to remain delta-neutral as the price changes. It reflects hedging pressure, not notional value.
Therefore, the practical takeaway from Eng’s analysis is clear: anticipate continued price pinning around certain levels until the Christmas expiry, and then observe whether a shift occurs afterward. Watch to see if this post-expiry change materializes in realized volatility—and whether the price finally breaks free from repeatedly bouncing off the same levels, as if hitting an invisible barrier.
At the time of reporting, Bitcoin was trading at $87,953.
Frequently Asked Questions
FAQs Potential Bitcoin Gamma Flush Critical Market Period
BeginnerLevel Questions
1 What is this news headline about
Its a warning from a market analyst that the Bitcoin market could experience significant volatility and a sharp price drop in the next eight days potentially triggered by large options contracts expiring
2 What is a gamma flush in simple terms
Think of it as a chain reaction When the price of Bitcoin drops near a key level where many traders have placed bets it can force large institutions to rapidly sell Bitcoin to hedge their risk This heavy concentrated selling can push the price down even further very quickly
3 Why are the next eight days called critical
A large number of Bitcoin options contracts are set to expire soon This creates a situation where the market is more sensitive to price movements increasing the risk of a sudden exaggerated swing like a gamma flush
4 Should I sell my Bitcoin because of this warning
This is a personal financial decision The warning highlights a shortterm risk not a certainty Its a reminder that crypto markets can be volatile You should base decisions on your own investment strategy risk tolerance and longterm goals not just on one analysts prediction
5 What does 415 million refer to
This is an estimate of the potential scale of the selling pressure or the notional value of the options contracts involved that could trigger the event It gives a sense of the size of the market force being discussed
Advanced Practical Questions
6 What exactly is gamma in options trading
Gamma measures how fast an options delta changes High gamma near an expiry date means that as Bitcoins price moves the required hedging activity by market makers accelerates dramatically fueling volatility
7 What price level is key to watch for this potential flush
Analysts often identify max pain points or large clusters of open options contracts at specific strike prices If Bitcoins price approaches or breaks below one of these levels it could trigger the hedging selloff You would need to check current options data for the exact levels
8 Is a gamma flush always a bad thing
While it typically causes a sharp shortterm drop some