Author: CryptoSlate
Compiled by Deep潮 TechFlow
Deep潮 Summary: Throughout July, traders blamed the options wall for locking Bitcoin in place. But the wall has been dismantled twice, yet the price hasn’t moved. Now, a $2.5 billion call option bet is about to expire, and Bitcoin is still 9% away from its $70,000 target—the real issue isn’t options suppression, but simply no one is buying.
Traders had a solid explanation throughout July for why Bitcoin remained stagnant: dense options contracts had pinned the price in place. They believed that market makers selling these contracts would buy on every dip and sell on every rally to balance their books. Once the contracts expired, Bitcoin was finally free to move.
The futures contracts have now been settled for two consecutive Fridays, yet Bitcoin has remained stagnant. On Saturday, its trading price hovered just below $64,000, closing out a week in which it failed to hold above $66,000 before slipping back to levels that were theoretically supposed to be “protected.” The previously strong rationale has lost its validity; what remains is a dull reality: demand for Bitcoin is weak, and both buyers and sellers lack conviction.
The options numbers everyone is watching—and what they can tell you
Approximately 19,000 Bitcoin options expired on Deribit at 08:00 UTC on Friday, valued at around $1.2 billion. Deribit handles the majority of cryptocurrency options trading. The exchange identified the largest pain point for this expiration at $64,500. Bitcoin closed the day at $64,140, about $360 below the largest pain point, with an opening price of $65,099 and an intraday low of $63,740.
Last Friday, the key strike price for contracts of similar size was $63,000, and Bitcoin rose over the following days toward $65,400. Two expirations, two opposite outcomes—yet in either case, the key strike price showed no clear directional influence.
The max pain is a number cited weekly, as if it possesses inherent power. An option is a contract that gives someone the right to buy or sell Bitcoin at a set price on a specified date, while max pain is merely a price—the point at which sellers of these contracts need to pay out the least amount upon settlement. It is a snapshot of where the most bets are clustered, calculated based on current open interest. It has no mechanism that drives the price toward it.
The $1.2 billion figure must be treated the same way. That is the notional value of Bitcoin referenced by the contracts, while the actual amount at risk is only a small portion of that. We also cannot confidently say which direction market makers were forced to hedge toward settlement, as exchange data shows the number of contracts at each strike price, not who holds which side.
Confident assertions about market maker positions are almost always based on assumptions, and the growth of the options market has made these assumptions increasingly costly. Ethereum contributed an additional $234 million to Friday’s settlements, with the largest pain point at $1,875 and a put-to-call ratio of 1.29, indicating sustained demand for downside protection over the entire month.
What actually happened on Friday is easily visible in the trading data. CryptoQuant’s exchange-wide data tracks which side is crossing the spread, a good indicator of who is in a hurry.
On Friday, traders holding leveraged long positions were forced to liquidate $45.9 million, while short sellers only liquidated $7.4 million, resulting in an imbalance of approximately six to one.
Leverage itself remains subdued. The funding rate—the fee paid by leveraged longs to shorts to keep positions open—averaged 0.0038% across exchanges on Friday, down from 0.0064% five days prior and nearly neutral. Open interest in futures and perpetual contracts closed at $22.35 billion, up from $21.26 billion at the previous settlement, despite a 1.5% price decline; open interest rose even as prices fell. New positions entered during the downturn.
U.S. spot Bitcoin ETFs saw $225.2 million in outflows on Thursday, ending a seven-trading-day streak that attracted nearly $1 billion, with BlackRock’s IBIT accounting for $2.025 billion of the reversal. However, the week still closed with a net inflow of approximately $274 million.
Renewed tensions between the U.S. and Iran pushed stocks lower ahead of the weekend and weighed on cryptocurrencies; the Crypto Fear & Greed Index fell three points to 28, while implied volatility edged toward 35%.
The remaining stake is 9% away from the target.
Deribit has nearly $5 billion in open interest on its 70,000 USD and 72,000 USD strike prices for the monthly expiries on July 31, accounting for approximately 18% of the exchange’s entire $28 billion Bitcoin options book. Call options dominate at both strike prices. As of July 20, there were approximately 27,000 contracts at the 70,000 USD strike and around 21,000 at the 72,000 USD strike.
A structure accounted for a large portion of this. Deribit’s Chief Business Officer, Jean-David Péquignot, described a single large order: buying 20,000 call options with a strike price of $70,000 and selling 20,000 call options with a strike price of $72,000, resulting in a total notional value of approximately $2.5 billion for the combined position.
If Bitcoin closes above $70,000, this trade generates a profit; however, profits stop increasing once it breaks above $72,000. The upfront cost is lower than buying a lower-strike option alone, because selling the higher-strike option offsets part of the premium. Whoever established this position wants to achieve a specific price increase within a defined time window and is paying for it.
There is a reason for this time window. Jimmy Yang of Orbit Markets, an institutional liquidity provider, linked the bullish demand on July 31 to expectations that the CLARITY bill will pass, while traders have been reducing their positions.
Polymarket is currently pricing the probability of passage in 2026 at around 35%, down from over 80% in February, after the merged banking-agriculture draft removed ethics provisions demanded by Democrats, prompting formal objections from Senators Chris Murphy, Chris Van Hollen, and Jeff Merkley. The August recess leaves a narrow window for Senate action.
The expiration date is also two days after the Federal Reserve's decision. The FOMC will meet on July 28 and 29, with the statement to be released at 2:00 p.m. Eastern Time on Wednesday, followed by Kevin Warsh’s press conference half an hour later.
This meeting did not include economic forecasts, so the wording of the statement carried all the signaling. Interest rates have been held steady at 3.50% to 3.75% for four consecutive meetings; the futures market assigns about a one-third probability to a 25-basis-point hike and essentially zero probability of a rate cut.
Director Lisa Cook noted an inflation rate of 3.7%, while Vice Chair Philip Jefferson and Director Christopher Waller both warned that the policy may be reassessed if prices remain elevated.
Bitcoin must rise approximately 9% within six days to make the $70,000 strike in-the-money, while Deribit’s own probability model assigns only a 14.5% chance of the price reaching that level during July and a 4.1% chance for $72,000.
Gamma exposure—which measures how aggressively market makers must adjust their hedges in response to price movements—is concentrated at $65,000 and $72,000. The nearby cluster sits precisely at the market peak and is relatively small. The larger cluster is far enough away that it holds little appeal until Bitcoin itself covers most of that distance.
Thus, the largest concentration of beliefs in the Bitcoin options market is centered on a price level that has less than a one-in-six chance of being reached, and it expires just 48 hours after a central bank meeting that no one could confidently predict.
The two weekly expiries that drew all the attention this month have settled, and nothing has changed. Bitcoin’s range belongs to anyone who shows up in the spot market, but few have done so over the past week.