Key Insights:
- BTC price formed a double bottom before the Bitcoin options expiry
- $10.5B BTC options expiry reshaped positioning
- Negative gamma raised short-squeeze volatility risks
Bitcoin price surged to $68,333 on Wednesday. That marked an eight-day high as traders positioned ahead of Friday’s $10.5 billion monthly Bitcoin options expiry. The move followed a double bottom formation near $62,500, even when the asset remained 21% lower month over month. Traders faced a tight window to shift positioning before contracts settled.
The Bitcoin price rebound emerged against a derivatives backdrop that favored defensive positioning. Options markets carried elevated downside exposure after February’s breakdown below $75,000 caught bullish strategies off guard.
As expiry approached, the balance between calls and puts signaled a contested settlement zone rather than a clean directional bias.
Bitcoin Options Data Shows Structural Edge for Bears
Deribit data showed the exchange controlled 76% of market share, holding $4.5 billion in call open interest and $3.4 billion in put contracts. OKX followed with $610 million in calls and $385 million in puts. CME also listed $255 million and $287 million, respectively. That concentration meant most positioning risk sat on one venue.
At first glance, aggregate put open interest appeared roughly 25% lower than calls. However, the structure of strikes told a different story. If price remained below $70,000 at expiry, 88% of Deribit calls would expire worthless, reflecting how traders misjudged February’s momentum shift.
Even after excluding extreme upside bets above $105,000, only 37% of the remaining call positions targeted strikes below $75,000. That left effective bullish exposure closer to $780 million.
In contrast, $1.44 billion in puts targeted levels under $60,000, though some represented calendar spreads rather than outright crash bets.
Put open interest totaling $1.15 billion clustered at $72,000 and above, creating offset pressure against calls. This configuration suggests that bears maintained structural protection despite headline call dominance.
Negative Gamma and Short Liquidations Intensify Moves
Glassnode reported that Bitcoin options positioning flipped into expanding negative gamma zones around and below spot levels. Its full-history gamma exposure heatmap showed thinning positive “gamma walls” above market price. With spot trading inside a short-gamma pocket, dealer hedging mechanics amplified intraday swings.
Short-gamma environments force market makers to buy into strength and sell into weakness. That feedback loop increases volatility during settlement windows. As liquidity thinned into expiry, small directional pushes triggered outsized reactions in derivatives hedging flows.
Meanwhile, Mr. Crypto Whale posted that more than $300 million in short positions had been liquidated within 24 hours. Binance order flow appeared to support aggressive spot accumulation. That pressured overleveraged shorts. As the price climbed, forced buybacks accelerated upside momentum through classic short-squeeze dynamics.
This reaction mirrored how derivative imbalances can cascade quickly when positioning tilts heavily one way. Options expiry magnified that sensitivity because dealers adjusted delta exposure continuously into settlement.
Bitcoin Options Volatility Amplified by Stock Market Link
TradingView data showed a 90% correlation between Bitcoin and the Nasdaq 100 Index during the period. That alignment reinforced how macro-driven risk appetite shaped derivatives outcomes. The link grew more pronounced as traders monitored Nvidia earnings after the U.S. market close.
Although Bitcoin’s correlation with equities rarely persists long term, short-term synchronization often influences expiry flows. If equities stabilized, dealer hedging likely supported spot resilience. Conversely, renewed weakness in technology stocks risked pushing the price back into put-dominated strike zones.
The options structure indicated that as long as Bitcoin price traded under $75,000, the advantage leaned toward protective positioning. That threshold marked the pivot where upside calls regained effective leverage over puts. Until then, gamma pressure and hedging flows dictated intraday volatility.
Friday’s settlement will test whether bulls can extend the rebound beyond strike clusters that currently cap momentum. A decisive move above $70,000 could shift expiry pain toward put holders, while failure to hold current levels may reinforce defensive dominance.