Crypto derivatives markets are approaching a pivotal year-end moment, with a large volume of bitcoin and ether options on Deribit set to expire around the Boxing Day holiday.
The expiry will see roughly $23.6 billion in bitcoin options and $3.8 billion in ether options come off the exchange, accounting for more than half of Deribit’s total open interest. Each options contract represents one BTC or one ETH.
Despite recent price fluctuations, positioning into the settlement remains skewed to the upside. Deribit data show a put-call ratio of 0.38, indicating a strong preference for call options.
“The max pain level is near $96,000, and the low put-call ratio highlights how heavily positioning is tilted toward calls,” said Sidrah Fariq, Deribit’s global head of retail sales and business development, in comments shared on Telegram. The max pain price refers to the level at which options buyers collectively incur the greatest losses, while sellers — typically institutional desks and market makers — stand to gain.
Options contracts give traders the right, but not the obligation, to buy or sell an asset at a predetermined price at expiry. Calls signal bullish expectations, while puts are commonly used for downside protection or bearish exposure.
Max pain in the spotlight
As expiry approaches, the max pain level has become a key reference point. Some market participants believe hedging activity by professional traders can draw spot prices toward that level, implying potential moves toward $96,000 for bitcoin and $3,100 for ether by settlement.
Even so, the theory remains contentious, with many in the derivatives market questioning its practical influence on prices.
Bullish positioning meets holiday conditions
The put-call ratio implies there are just 38 puts outstanding for every 100 calls, underscoring how aggressively traders have pursued upside exposure throughout the year. Open interest is concentrated in call strikes between $100,000 and $116,000, while the $85,000 put remains the most popular downside hedge.
Large expiries typically generate volatility as traders close or roll positions forward. Fariq noted that some puts in the $70,000 to $85,000 range are being rolled into January expiries.
“Whether traders allow December puts to expire or extend them will help determine whether downside risk is simply year-end positioning or a broader structural reset,” she said.
Despite the scale of the expiry, volatility expectations remain restrained. “The settlement falls on Boxing Day, liquidity is thinner due to the holidays, and while upside exposure dominates, macro uncertainty continues to limit strong directional conviction,” Fariq added.
Deribit’s bitcoin DVOL index — which measures 30-day implied volatility — is currently around 45%, down from 63% in late November when bitcoin briefly dipped toward $80,000. The decline suggests fading market anxiety and lower expectations for sharp price swings tied to the expiry.
