CoinDesk 20 Index: 3,982.48 +2.83%
Bitcoin (BTC): $106,940.08 +3.14%
Ether (ETH): $4,006.46 +2.91%
S&P 500: 6,074.08 +0.38%
Gold: $2,644.45 -0.31%
Nikkei 225: 39,364.68 -0.24%

Bitcoin traded around $107,000 during the European morning, about 1% lower than Monday's all-time high of nearly $107,800. Bitcoin maxis have been in Christmas spirits ever since the U.S. elections in early November, with President-elect Donald Trump's bullish overtures to the industry a sign of the growing institutional alignment with the digital asset market.The latest leg up for BTC, however, faces a near-term headwind in the form of the Federal Reserve’s rate decision on Wednesday. Moreover, with this cycle marked by growing institutional participation, the markets might be in for further volatility as the holiday season approaches. TradFi participants often adopt a risk-off stance and close positions ahead of the break.

MicroStrategy's addition to the Nasdaq-100 index is a big deal, but its potential inclusion in the S&P 500 index could be an even bigger opportunity, broker Benchmark said. Michael Saylor's company easily meets S&P 500 inclusion criteria in terms of market cap and trading volume, but currently does not meet two other requirements. The company needs to report positive earnings for the most recent quarter and "total positive earnings for the sum of its trailing four consecutive quarters," analyst Mark Palmer wrote. Still, MicroStrategy has said that it plans to adopt new FASB guidance for the accounting treatment of bitcoin held on its balance sheet in first-quarter 2025, Benchmark said, and this "would position it to immediately begin reporting positive earnings."

Ripple’s RLUSD $1 stablecoin is attracting bids of up to 836 XRP ($2,068) on on-chain marketplaces ahead of its Tuesday release, a sign of frenzy among enthusiasts who may want to be the first to hold the token. Each XRP trades for just under $2.50. Speculators often engage in high-priced transactions for small quantities of a new token or NFT to gain early access or to capitalize on the novelty of holding the first batch. The demand means RLUSD might not have enough liquidity to maintain its peg effectively in the first few hours after it goes live, meaning there may be some price discrepancies from the intended $1 value. However, each token will be redeemed for only a dollar, and it is unlikely to remain depegged for an extended period.

While bitcoin continues to reach lifetime highs, the latest options market data indicates that traders aren't chasing the uptrend with the same zeal as before.

The current pricing of options trading on Deribit indicates that traders are adopting a more cautious outlook for the short term.

At press time, the 25-delta risk reversal for options expiring on Friday was negative, indicating the relative richness of put options.

That starkly contrasts with the trend of the past few weeks, where traders aggressively chased new price peaks, driving short-term and long-term call biases to over four or five volatility points. In fact, short-term risk reversals frequently displayed a stronger call bias than their longer-term counterparts.

The latest block trades coming through on Deribit also show a bearish lean. The top trade so far today has been a short position in the Dec. 27 expiry call at the $108,000 strike followed by long positions in the $100,000 strike puts expiring on Dec. 27 and Jan. 3.

- Omkar Godbole