Whale Awakening: A Liquidity Hunt in the Crypto Market

Tomorrow, a derivatives contract with a notional value of $28.5 billion is set to settle, with Bitcoin options accounting for $23.7 billion. This scale is double that of the same period last year, and exchange data has confirmed it’s a new all-time high. But what’s truly worth caution isn’t the number itself, but the timing of its occurrence.

Holiday markets are usually quiet, with low trading volumes. In such an environment, once massive options positions begin to be closed and settled, market reactions can be amplified infinitely. Can you imagine? Orders that normally wouldn’t cause a ripple could trigger a tsunami when liquidity dries up.

The derivatives market is like an underwater iceberg, already brimming with energy. Most traders focus only on price movements in candlestick charts, ignoring the invisible pressure cooker of options contracts. Once settlement triggers, a chain reaction can spread rapidly—either panic selling or rocket-like surges, with volatility released in a very intense manner.

So, what should you do at this time?

First, avoid heavy bets on a single direction right before settlement. Whale hedging operations can distort prices in the short term, but that’s not reflective of true supply and demand.

Second, keep a close eye on the first 48 hours after settlement. Historical experience shows that the real trend often becomes clear only after large settlements are completed. Whether it’s breaking new highs or a pullback after good news is exhausted, that’s when clarity emerges.

Finally, keep sufficient ammunition. Whether it’s bottom-fishing or chasing breakouts, the first wave of market movement after liquidity recovers is usually the most explosive and deceptive. Waiting for volatility to fully release before entering can help you capture the purest trend.