Bitcoin options worth about $7.9 billion expire on Deribit on Friday, with positioning data pointing to $62,000 and $75,000 as key levels to watch.
The $75,000 level is where most of the trading in call options, which represent bullish bets, has occurred, according to data source Glassnode. About $395 million in open interest is concentrated around the $75,000 strike at the time of writing. This number represents the dollar value of the number of active call option contracts today.
More importantly, the “gamma exposure” is deeply negative at the 75,000 strike – meaning traders’ hedging flows are likely to amplify price moves around this level. As the price rises, they may need to buy more, and when it falls, sell more, reinforcing the direction of the movement.
As a result, the 75,000 level can act as a zone of increased volatility, where price swings sharpen rather than stabilize.
Options are derivative contracts that give the buyer the right to buy or sell the underlying asset, in this case BTC, at a predetermined price at a later date. A call option gives the right to buy and a put option gives the right to sell.
It’s like paying a reservation fee to reserve the right to trade a house at today’s price – you have the right to buy or sell it later at that price, but you’re under no obligation to complete the trade if the market price goes against you.
On the downside, the largest concentration of put open interest is at $62,000, with about $330 million in contracts, marking the main zone of downside protection.
Between the two, there is this maximum pain level of $71,000, which can act as a big man heading into the expiration. The “max pain” point is the price level at which the largest number of option contracts are expected to expire worthless on the settlement date, although this level may change as prices and open interest change until expiration.
All in all, the options market is effectively between $62,000 and $75,000, with $71,000 serving as a midpoint. Unlike March, when bitcoin traded under max pain, the market is now sitting above it to test whether bitcoin can hold on to its gains.
Potential cards squeeze higher
Funding rates in perpetual futures have remained negative, indicating a build-up of short positions that could fuel a squeeze if prices hold higher. Bears may offset their bearish bets if prices remain firm above $75,000, which could add to the upside momentum.
While data from Checkonchain shows that Deribit now has about $31 billion in open interest, the largest across options markets, surpassing even BlackRock’s IBIT, which is close to $28 billion.
