CoinDesk 20 Index: 3,830.21 -0.08%
Bitcoin (BTC): $103,701.57 +0.95%
Ether (ETH): $3,915.66 +1.02%
S&P 500: 6,051.09 +0.00%
Gold: $2,658.78 +0.37%
Nikkei 225: 39,457.49 -0.03%

Bitcoin surged to an all-time high above $106,000 before retreating below the $104,000 mark. Traders may have one eye on the upcoming rate cut by the Fed, which could be accompanied by commentary tempering expectations of further reductions in the new year. If the projections reflect slower or fewer rate cuts, Treasury yields and the dollar will likely extend their recent runs higher, potentially making it harder for risk assets, including BTC, to stay as strongly bid as they have been of late. BTC on Coinbase is trading at a discount to Binance, a sign of weaker demand in the U.S., a CryptoQuant tracker shows.

As bitcoin appears to have secured a foothold of about $100,000, traders are now targeting above $120,000 as the next milestone. This month tends to be historically bullish for bitcoin in a move that’s colloquially termed the "Santa Claus Rally." Data from the past eight years shows that bitcoin ended December in the green six times since 2015, running at least 8% to as much as 46% (in the outlier year of 2020). A recurrence could set BTC for an extended rally throughout 2025, some analysts are predicting. “We think bitcoin still has tremendous upside potential and could easily hit the $125k mark by the end of 2025,” Jeff Mei, COO at crypto exchange BTSE, said over Telegram. “While some say the upside has already been priced in over the last month or so, we think the rally is just getting started.”

Despite bitcoin's ascent to a record, the broader digital asset market was relatively sedate, with the CoinDesk 20 Index around 1% lower than 4 p.m. ET on Friday. ETH failed to establish a foothold above $4,000 amid reports of large withdrawals of staked ether from Lido Finance. Payments-focused XRP traded more than 2% lower, weakening a bullish technical pattern. Ripple CTO David Schwartz raised concerns about FOMO-driven volatility before the debut of the company’s RLUSD stablecoin, which it plans to use for cross-border payments alongside XRP. Early price fluctuations and high pre-launch bids don’t quite reflect the true market value, Schwartz said.

Surging volumes in put options linked to BlackRock's spot bitcoin ETF could be interpreted as bearish sentiment. That's not necessarily the case.

Most of the activity probably stems from market participants looking to generate passive income through "cash-secured put selling" rather than outright purchase of the options as bearish bets, according to Greg Magadini, Amberdata's director of derivatives.

Savvy traders often write OTM puts to acquire the underlying asset at a lower price while pocketing the premium received by selling the put option. They do so by continuously maintaining the cash required to purchase the asset if the owner of the put option exercises their right to sell the asset.

Hence, the strategy is called "cash-secured" selling of puts. In IBIT's case, sellers of the $35 put expiring in January 2026 will keep the premium if IBIT stays above that level until expiry. If IBIT drops below $35, the put sellers must buy the ETF at that price while keeping the premium received.

"The $35 Puts for Jan 2026 traded +10k contract with an IV range of 73.52% to 69.94%, VWAP at 70.75% suggests net selling from the street…potentially Cash Secured put selling flows (for traders who missed the rally)," Magadini told CoinDesk.

- Omkar Godbole