A significant $7.8 billion worth of Bitcoin (BTC) options is set to expire at the end of January, with market participants anticipating potential volatility. As per Deribit data, about $6 billion of the notional value in options could expire out of the money, with a notable portion being put options, which grant holders the right to sell BTC at a specific price.
Currently, Bitcoin is trading well above the “max pain” level of $98,000, which is the price point where option holders are expected to experience the greatest losses, while market makers are positioned to benefit the most. This could lead to some price manipulation as expiration nears, with market makers likely aiming to push Bitcoin’s price toward the $98,000 mark.
According to Deribit CEO, Luuk Strijers, the expiration of these options could drive significant market movement. “With approximately 74,000 contracts expiring next week, the resulting delta hedging flows could impact market dynamics,” he said. “The renewed regulatory landscape allowing banks to hold Bitcoin and rumors of a strategic Bitcoin reserve are also fueling speculation and market interest.”
Additionally, Strijers pointed out that the Deribit Volatility Index (DVOL) currently stands at 60, matching the volatility levels seen at the end of last year, indicating heightened market uncertainty as the expiration approaches.
