Bitcoin and Ethereum Rally Near Record Option Settlement Levels as Market Liquidity Shrinks Today

$2.2 Billion Derivatives Contract Settlement Triggers Market-Wide Deleveraging

The crypto derivatives market faced a critical reset today as approximately $2.2 billion worth of Bitcoin and Ethereum options contracts reached expiration across major venues. The timing proved significant for market dynamics, as this large-scale settlement coincided with broad-based position unwinding across the industry.

Open Interest Collapses to 2022 Lows—A Signal of Market Cleansing

More telling than the expiry itself: Bitcoin’s 30-day open interest has plummeted to levels not seen since 2022, marking a dramatic deleveraging wave across derivatives platforms. Major trading venues experienced substantial OI reductions, with the largest pullback exceeding 1.5 million BTC, followed by cascading declines across secondary platforms. Gate.io and other key exchanges similarly reported significant open interest contractions ranging from several hundred thousand to nearly 800,000 BTC each.

This sharp decline reflects traders cutting leverage positions en masse. Historically, such extreme deleveraging phases serve as market resets—periods where excess positioning gets purged, creating conditions for either prolonged consolidation or, if fresh capital returns, potential bullish rebounds.

Bitcoin Faces Critical Test at $90,000-$100,000 Range

Bitcoin options expiring today totaled approximately $1.84 billion, with the “max pain” strike price anchored near $90,000. Current trading around $95.63K places BTC comfortably above this level, though positioning data reveals a market split between defensive and aggressive traders.

Put options clustered below $85,000 signal meaningful downside protection, while call options stacked between $90,000 and $100,000 underscore persistent bullish sentiment. This equilibrium between protective hedges and directional bets has kept Bitcoin trading in a relatively tight range despite the settlement event.

Ethereum Holds Ground Despite $384 Million Options Expiry

Ethereum’s approximately 126,000 expiring contracts—worth roughly $384 million—settled with ETH near $3.31K, slightly above the $3,100 max pain level. Call option concentration above $3,000 remains robust, indicating trader confidence in maintaining elevated price levels post-expiry.

If Ethereum remains above the max pain threshold following today’s settlement, dealers may adjust hedges in ways that amplify upside price sensitivity, potentially setting the stage for more responsive market movements in coming sessions.

What Comes Next: Consolidation or Conviction?

Historical patterns suggest that markets emerging from severe open interest contractions typically enter consolidation phases. The question now: will fresh buying interest materialize to fuel recovery, or will sentiment remain subdued?

The coming days will prove critical. With leverage largely cleared from the system, the market has gained breathing room—but also lost the momentum traditionally provided by leverage-driven positioning. External economic catalysts and genuine spot demand will become the primary drivers.

Key Takeaway: Today’s dual events—massive options expiry and historic open interest lows—represent a market cleansing. The resulting clarity may expose whether underlying conviction remains for additional Bitcoin and Ethereum appreciation, or if consolidation persists until sentiment shifts.