Bitcoin is facing a massive options expiry that risks putting more pressure on a market already struggling with fading institutional demand and macroeconomic headwinds.
About US$10 billion of notional value in Bitcoin options is set to expire on Deribit, the largest crypto options venue, at 4pm Friday in Singapore. Because most of those options are bullish bets and Bitcoin has been falling, there’s potential for traders to adopt more defensive or bearish positioning.
“This is a book that has been positioned for higher prices over the medium term, now being marked against a spot that has slipped,” said Jean-David Pequignot, chief commercial officer at Deribit. “The consensus long-call positioning has drifted offside.”
Bitcoin dipped below US$60,000 in New York trading Wednesday to US$59,023, its lowest since October 2024, and was at US$60,800 at 12.30pm Thursday in Singapore. It has struggled to find its footing since the Oct 10 market crash and is down more than 50% from its record high.
The largest cryptocurrency is below its 200-week moving average, a technical level that can signal a prolonged bear market.
The Bitcoin options expiring on Deribit represent about 37% of open interest, the total number of contracts currently active.
The ratio of bearish “puts” to bullish “calls” is 0.83, according to Pequignot, indicating more bets are on Bitcoin appreciating.
The bulk of call open interest is now out of the money, meaning the contracts have no intrinsic value at current prices. Puts, by contrast, are clustered around US$60,000 to US$65,000 and US$70,000 to US$75,000. That positioning suggests bearish bets are more likely to pay off.
To be sure, “expiry mechanics clear positioning; they do not set direction,” said Adam Haeems, head of asset management at Tesseract Group. But the key issue is still a call-skewed market falling into thin quarter-end and summer liquidity, he said.
“Thin books plus a concentrated expiry mean Friday’s move likely overshoots in whichever direction flow tips first, then mean-reverts once dealer hedging unwinds,” Haeems said. Dealer hedging refers to trades market makers use to manage exposure as prices move.
Any sharp move around expiry may say more about positioning than a lasting shift in trend. Haeems said the more important test will come in the first full week of July, after the quarterly book has cleared and leverage has been reduced.
The backdrop has worsened outside derivatives.
US-listed Bitcoin funds have posted almost US$3 billion of net outflows in June so far, according to data compiled by Bloomberg. Strategy Inc, the largest corporate holder of Bitcoin, is also under pressure amid investor concerns about its ability to meet its financial obligations.
Macro pressure is also weighing on cryptocurrencies as the prospect of rising interest rates encourages capital away from assets that don’t pay a yield.
Griffin Ardern, co-founder of Primal Fund, said option traders’ longer-dated bearish bias toward Bitcoin has intensified, while hawkish Federal Reserve commentary and elevated Treasury yields suggest investors are pricing in tighter liquidity.
“Under conditions of contracting liquidity, BTC typically does not fare so well,” he said.
