Friday, Bitcoin options or derivative contracts worth billions will expire on the Deribit crypto exchange. Traders may want to note that the momentum of the expiration is such that the market price of BTC could rise towards a very specific point: $75,000.
Deribit, the world’s largest crypto options exchange, will settle Bitcoin options contracts worth $14.16 billion on Friday at 08:00 UTC. This means that almost 40% of all open interest – the dollar value of all active contracts on the exchange – will expire in about 48 hours. On Deribit, an options contract represents one BTC.
Options are contracts that allow you to bet on whether the price of an asset, such as BTC, will rise or fall. A call option is a bet that the price will rise, a put option is a bet that the price will fall. Traders buy options to try to profit from price fluctuations, or write (short) options to earn income while taking the risk that prices will move in the buyer’s favor.
Here’s why exhalation is important
According to Deribit data, the “maximum” price – the level at which most contracts would expire worthless (lottery tickets that don’t win) – sits at $75,000.
This level could therefore act like a magnet, according to Jean-David Péquignot, commercial director of Deribit.
“With Bitcoin currently trading near $71,000, the Max Pain price of $75,000 represents a gravitational pull. Historically, this encourages delta hedging by market makers who can push prices toward the strike price where most options expire worthless,” Péquignot told CoinDesk.
Here’s how it works. According to the maximum pain theory, options writers (usually large funds, institutions or market makers with significant capital) control or influence the spot price towards the pain point in order to limit payouts to buyers and thus inflict maximum damage on them. This occurs through normal trading in the spot or futures markets, rather than guaranteed manipulation.
These mechanical buys and sells often bring the spot price closer to the maximum pain level, which is $75,000 in the case of Bitcoin.
Although Max Pain is well known in traditional markets, his influence in crypto remains debated. Deribit, however, signals the level as a potential magnet. To add to the intrigue, several analysts have identified $75,000 as key resistance, above which Bitcoin could enter full bullish mode.
Controlled exhalation
Quarterly expirations typically trigger massive position adjustments and hedging flows. However, the impending expiration will likely proceed normally, without a burst of outsized volatility.
This is evident from the decline in the implied volatility index.
“Over the past few sessions, we have seen a compression in implied volatility (IV), with BTC and ETH DVOL falling by around 6 points. This suggests that the market is pricing in a controlled expiration rather than an immediate explosion in volatility,” Péquignot said.
He added that market data suggests traders are not looking for a breakout as geopolitical uncertainty persists in the form of a war in Iran. He specifically pointed to institutions writing call options at higher strike prices (levels above the prevailing spot price) as evidence of measured bullish sentiment. Traders typically write blanket calls to collect premiums in addition to their spot market holdings.
“The Put/Call ratio for Bitcoin options remains healthy (0.63), but the concentration of sell-side calls suggests a ceiling of institutional resistance, as traders have replaced their positions with bank premiums while waiting for geopolitical time to run out,” he noted.
Overall, the big expiration with $75,000 acting like a magnet comes at an intriguing time: bitcoin has weathered the turbulence of the Iran war remarkably well, maintaining strength even as stocks falter and energy markets remain volatile.
