from The American Heritage® Dictionary of the English Language, 4th Edition
- n. An elasticized fabric ring used chiefly by women and girls to gather or fasten the hair.
from Wiktionary, Creative Commons Attribution/Share-Alike License
- n. A small elasticated ring of fabric placed around long hair to hold it in place behind the head.
After the company that made such rings.(American Heritage® Dictionary of the English Language, Fourth Edition)
scrunch + -ie, as a scrunchie “scrunches” closed (Wiktionary)