Nearly $3 billion in Bitcoin and Ethereum options on Deribit expired at 08:00 UTC today, putting the derivatives market under intense scrutiny.
Heading into today’s options expiration, interest will focus on whether the recent price stability marks a temporary pause or the beginning of a new directional move.
As of this writing, Bitcoin is trading at $66,372, with a high of around $74,000, and total notional open interest exceeds $2.53 billion.
Meanwhile, Ethereum is trading near $1,950, with notional open interest around $425 million and a maximum pain level around $2,100.
The data suggests that a large portion of open interest would benefit if prices rose to maximum pain levels, but sentiment in the options market remains cautious.
Despite the recent rebound from last week’s sharp sell-off, options indicators suggest traders are still hedging against downside risks.
Laevitas analysts noted that Bitcoin’s risk reversal remains heavily biased towards puts.
“Bitcoin 1-week and 1-month 25 Delta RR have recovered from extreme lows but remain significantly negative at around -13 and -11 volumes respectively, indicating continued need for downside protection,” the derivatives analyst said.
Risk reversals are widely used to measure sentiment in derivatives markets. At the same time, persistent negative data often indicates that traders are paying a premium for protective puts, which often reflects concerns about further declines.
The current cautious tone comes after a dramatic market event in which Bitcoin briefly fell below $70,000, triggering widespread liquidations and extreme derivatives imbalances.
Deribit analysts said the move triggered one of the most pronounced bearish (sales) demand shifts in years.
Deribit analysts said: “BTC broke through $70,000 last week, triggering a cascading liquidation in one of the most extreme bearish skews in years, before rebounding to the $67,000 range.”
Such events often have a lasting psychological impact on markets, with traders remaining defensive even after prices stabilize.
Recently, however, derivatives positions have begun to shift, with some traders moving back into call (buy) options as volatility declines from panic levels. Deribit analysts observed that the market is now at a critical inflection point.
Option expirations of this size can sometimes have a short-term gravitational effect on the price, especially when a large amount of open interest is concentrated around a specific strike level.
