Bitcoin and the overall crypto market took a hit on Monday, dropping steadily during U.S. trading hours. After briefly rising above $90,000, Bitcoin (BTC) slipped back down below $88,000. Ethereum (ETH) also lost momentum and fell under the key $3,000 mark. This dip shows that traders are still nervous, especially with a major crypto event coming up later this week — one of the largest options expirations in the history of the market.

Even though cryptocurrencies dropped in price, some crypto-related stocks held their ground or even moved higher. Hut 8 (HUT), a Bitcoin mining company, saw its stock jump by about 16%. This surge came after last week’s news that it signed a 15-year agreement with Fluidstack to lease AI data center space. The stock also got a boost from a price target upgrade by analyst Mark Palmer at Benchmark. Other companies like Coinbase (COIN) and Robinhood (HOOD) were also up for part of the day, but their gains shrank as Bitcoin and Ethereum prices dropped again. Strategy (MSTR), previously known as MicroStrategy, had a similar story — it started strong with a 3% intraday gain but ended the day slightly down.

All eyes are now on Friday’s massive crypto options expiration on Deribit, the largest platform for crypto derivatives trading. On that day, options contracts worth around $28.5 billion in Bitcoin and Ethereum are set to expire — more than half of Deribit’s total open interest, which is $52.2 billion. This huge event adds more pressure to an already volatile market where Bitcoin has been bouncing between $85,000 and $90,000.

Deribit’s chief commercial officer, Jean-David Pequignot, pointed out that Bitcoin’s “max pain” level — the price where options sellers make the most money — is close to $96,000. However, there’s a big chunk of open interest, about $1.2 billion, sitting at the $85,000 put strike price. That means if prices fall further, it could trigger more selling pressure.

While some traders are still betting on longer-term gains — with call options aiming for Bitcoin to reach $100,000 or even $125,000 — many are playing it safe in the short term. Protective puts have become more expensive, showing increased demand for downside protection.

Instead of leaving the market completely, traders are moving their positions further out to January. This suggests they’re preparing for near-term risk while staying invested for potential long-term gains. In summary, falling crypto prices, high-stakes options activity, and changing strategies in derivatives trading all point to a cautious mood in the crypto space as we head toward the end of the year.

Key terms: Bitcoin price drop, Ethereum decline, crypto volatility, options expiration, Deribit open interest, max pain level, protective puts, crypto stocks performance, Hut 8 AI lease deal, crypto derivatives market.