A significant wave of bitcoin options is set to expire, potentially delivering another blow to an already strained market grappling with weak institutional demand and macroeconomic headwinds.
Approximately $10 billion worth of bitcoin options are scheduled to expire this Friday at 4:00 PM Beijing time on Deribit, the largest crypto options exchange. With a majority of these being bullish bets placed during a period of subsequent price decline, traders may be forced to adopt defensive or even bearish positions.
Jean-David Pequignot, Chief Commercial Officer of Deribit, noted that the market's positioning was initially structured for a medium-term bullish outlook, but has been upended by the persistent decline in the spot price, leaving the consensus bullish stance significantly misaligned with reality.
Bitcoin briefly fell below the $60,000 mark during Wednesday's New York trading session, hitting a low of $59,023—its weakest level since October 2024. As of Thursday afternoon, it was trading around $61,673. The cryptocurrency has struggled to find stability since the market downturn on October 10th and has now retraced over 50% from its all-time high.
Currently, Bitcoin is trading below its 200-week moving average, a technical level often viewed as a signal of a long-term bear market. The options expiring on Deribit represent about 37% of the total open interest across all platforms.
Data from Pequignot shows a put/call ratio of 0.83, indicating that bullish bets still outnumber bearish ones. However, a large portion of these call options have strike prices far above the current spot price, rendering them "out-of-the-money" and worthless. Conversely, put options are concentrated in the $60,000-$65,000 and $70,000-$75,000 ranges, suggesting a higher probability of profit for bearish bets.
Adam Haeems, Head of Asset Management at Tesseract Group, pointed out that the expiration process itself merely clears positions and does not dictate market direction. The core issue, he explained, is that this bullish-skewed market structure coincides with quarter-end and typically thin summer liquidity.
He warned that thin order books combined with concentrated expirations mean that whichever direction the market initially moves on Friday could lead to an overshoot, with prices potentially reverting to the mean after market makers unwind their hedging positions.
Haeems emphasized that the heightened volatility around expiration reflects positioning dynamics more than a fundamental trend shift. A more telling test for the market will come in the first full trading week of July, after quarterly contracts have settled and leverage in the system has decreased.
Beyond the derivatives market, the broader macroeconomic backdrop continues to deteriorate. Market data indicates that U.S.-listed spot bitcoin ETFs have seen net outflows of nearly $3 billion since June. MicroStrategy Inc (NASDAQ: MSTR), the world's largest corporate holder of bitcoin, is also under pressure as investor concerns over its debt-servicing capacity grow.
On the macro front, expectations for higher interest rates are diminishing the appeal of non-yielding assets like bitcoin, leading to a continued capital exodus from cryptocurrencies.
Griffin Ardern, Co-founder of Primal Fund, observed that options traders are showing increased bearish sentiment on bitcoin's longer-term prospects. Concurrently, hawkish commentary from Federal Reserve officials and elevated U.S. Treasury yields suggest the market is pricing in tighter liquidity conditions.
Ardern concluded that bitcoin typically underperforms in an environment of contracting liquidity.
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