- Roughly $15.9 billion of bitcoin options and $2.1 billion of ether options expire Friday at 8:00 UTC, according to Deribit chief executive Luuk Strijers. The bitcoin settlement alone removes 37% of Deribit entire outstanding BTC open interest of about $43.5 billion.
- Positioning is heavily bullish. The put-call open interest ratio stands at 0.69, which Strijers described as a book built for higher prices, and it is one of the largest quarterly expiries of the year on the venue.
- Much of that positioning is already profitable. The $70,000 strike carries more open contracts than any other and those calls are deep in the money, with 55% of the $9.4 billion in call bets in the money and puts largely worthless, leaving about a third of the entire $15.9 billion book in profit.
- Bitcoin traded at $85,925.35 and ether at $2,697.44. Max pain, the level at which option buyers collectively lose most, sits at $75,000, roughly 12% below spot, though the theory behind it is widely debated.
What Happened?
Deribit chief commercial officer Jean-David Pequignot said the spread of open interest implies a price floor near $75,000. He noted heavy concentration at the $85,000, $90,000, $95,000 and $100,000 call strikes, reflecting large call condor blocks now coming into play with spot near $86,000, while defensive put structures anchored at $60,000, $70,000 and $75,000 create a layered support floor. Deribit characterised max pain as a soft magnet for price into expiry. Strijers said traders will watch price action around $85,000 and how positions roll over into the October and December expiries.
Why It Matters?
Strijers explanation of the recent rally deserves more attention than it will get, because it qualifies the story everyone else has been telling. As bitcoin moved through the $80,000 to $87,000 area, dealers who were short calls had to buy spot as prices rose in order to stay hedged, which added fuel to the advance. A meaningful portion of the move that has been attributed to SEC exemptions, ETF inflows and regulatory optimism was therefore mechanical hedging rather than conviction buying. Once that hedging flow rolls off after settlement, the pinning effect fades, short-term volatility can rise and the trading range can reset. In other words, a source of buying disappears on Friday and nothing replaces it automatically. The composition of the book tells you how wrong-footed positioning has been. The most heavily populated strike is $70,000 and it is deep in the money, meaning the largest concentration of contracts was written when bitcoin traded far lower and the market has run well past where participants positioned. That is why the book is call-heavy and a third of it is profitable, and it also means substantial realised gains become available to take at settlement. The cross-asset point matters too: roughly $7 trillion of US equity options expired last Friday with the same loss of dealer-driven volatility suppression, and crypto follows this week. Two markets are losing their positioning cushion within days of each other, into an unresolved oil situation and a Federal Reserve that has resumed raising rates.
What Next?
Friday 8:00 UTC settlement is the event, and the immediate thing to watch is whether price gravitates toward the $75,000 max pain level beforehand, though that theory is contested and the gap is wide enough that it would require a substantial move. The more reliable signal is rollover: how much open interest shifts into the October and December expiries rather than simply closing, since a large roll rebuilds the dealer hedging dynamic quickly while a small one leaves the market without it. Track realised volatility against implied in the week after settlement, as a widening gap would confirm the suppression was positioning-driven. The $85,000 level is the near-term marker Strijers identified, and the put structures at $60,000, $70,000 and $75,000 define where support would be tested on any reversal. Anyone treating recent strength as evidence of new institutional demand should reassess after seeing how price behaves without the hedging bid.
Affected Tickers and Coins: BTC, ETH
Source: CoinDesk
