Bitcoin Traders Are Betting on a 2026 Boom, Not a Santa Rally, After Fed Rate Cut

The Importance of the Federal Reserve interest rate reduction this week coincides with a steady spike in bullish options bets.

The most active strike in the options market is the $100,000 call expiring on December 26, with more than 18,360 bullish contracts open compared to just 2,540 bearish puts, according to a Wednesday tweet from options analysis platform Laevitas.

However, the structure of these bets suggests that traders are positioning themselves for a limited, tactical rebound rather than a no-holds-barred Santa rally. The large open interest consists of strategies such as long call condors and bull call spreads, which share limited upside potential.

The central bank also announced that it will buy about $40 billion a month of short-term government bonds starting Friday.

It is a technical move designed to manage liquidity in the banking system and maintain firm control over the interest rate target, the report said.

Despite these developments, other market data points reflect a muted outlook.

Although the 25-delta options skew has improved from -8% to -5% in two weeks, it remains negative, indicating that demand for downside protection continues despite post-Fed optimism.

As such, the potential for a relief rally is capped at $99,000, according to CryptoQuant Wednesday. report.

Bitcoin is currently trading around $89,500, down 2.4% in 24 hours and about 5.5% below its intraday high of $94,267 after the Fed’s decision, according to CoinGecko data.

So, what’s causing the decline?

“With Christmas and the year-end reckoning approaching, this period historically marks the weakest liquidity conditions in crypto,” Adam Chu, chief researcher at options analytics platform GreeksLive, told me. Declutter. “Market activity is generally subdued, limiting momentum for a sustained rally in the near term.”

The decline in implied volatility, Chu said, which points to reduced expectations for near-term price swings, further explains why a Santa rally is unlikely.

Instead, the main bullish belief is postponed until early 2026.

“The probability that Bitcoin will recover and settle the $100,000 by Christmas is now around 24%,” said Sean Dawson, head of research at on-chain options platform Derive. Declutter.

“The bulls are gearing up for an explosive first quarter,” Dawson said, pointing to a heavy surge in call options at the $130,000 and $180,000 strikes for March next year as evidence of where traders see the real opportunities.