Bitcoin spent much of July trapped in a range, and one common explanation was the options market. Traders argued that dealers who sold those contracts were hedging in ways that softened downside moves and capped rallies, keeping BTC pinned until expiry passed.
Two Friday settlements have now come and gone, and price is still largely where it was. Bitcoin traded just under $64,000 on Saturday after ending a week in which it failed to hold $66,000 and then slipped back toward the area many had said options would help defend. The cleaner reading now is less about options suppression and more about weak demand. There has not been much urgency from buyers, and the market on both sides has looked thin.
Weekly expiries did not produce a clear pull from max pain
About 19,000 bitcoin options expired on Deribit at 08:00 UTC on Friday, representing roughly $1.2 billion in notional value. Deribit handles most crypto options trading. The exchange placed max pain for the expiry at $64,500. Bitcoin closed the day at $64,140, about $360 below that level, after opening at $65,099 and falling as low as $63,740.
The previous Friday, a similarly sized expiry had a max pain point at $63,000, yet bitcoin climbed toward $65,400 in the days that followed. Two expiries, two different outcomes. In neither case did max pain show a reliable ability to pull price in one direction.
That matters because max pain is often treated as if it has force on its own. It does not. Options give the holder the right to buy or sell bitcoin at a set price by a set date, while max pain is simply the settlement level at which option writers would owe the least. It is a snapshot of where bets are stacked, calculated from open interest. There is no built-in mechanism that drags spot price toward it.
The same caution applies to the $1.2 billion headline figure. That number refers to the notional amount of bitcoin linked to the contracts, not the actual capital at risk. Exchange data shows how many contracts sit at each strike, but not who is on each side of the trade. That means it is hard to say with confidence which direction market makers were forced to hedge into settlement.
Claims about dealer positioning are often built on assumptions, and those assumptions get more expensive as the options market grows. Ethereum added another $234 million in contracts to Friday’s expiry. Its max pain level stood at $1,875, with a put-to-call ratio of 1.29, pointing to steady demand for downside protection over the past month.
Friday’s tape showed liquidations more than fresh spot buying
What did happen on Friday is easier to see in market data. CryptoQuant’s all-exchange metrics track which side is crossing the spread, a useful way to gauge who is acting with more urgency.
Leveraged long traders were forced to close out $45.9 million in positions on Friday, while short liquidations totaled only $7.4 million. That was roughly a six-to-one imbalance.
Leverage itself remained subdued. Funding rates, 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 earlier and close to neutral.
Open interest in futures and perpetual contracts ended at $22.35 billion, up from $21.26 billion at the prior expiry even though price fell 1.5%. Open interest was still rising on Friday, which suggests new positions were being added on the way down.
Spot-side flows were not especially supportive either. U.S. spot bitcoin ETFs posted $225.2 million in outflows on Thursday, snapping a seven-session run that had brought in nearly $1 billion. BlackRock’s IBIT accounted for $202.5 million of that reversal. Even so, the week still finished with about $274 million in net inflows.
Macro conditions added pressure. Renewed tensions between the U.S. and Iran weighed on equities heading into the weekend and spilled over into crypto. The crypto Fear and Greed Index fell three points to 28, while implied volatility slipped toward 35%.
$70,000 and $72,000 strikes dominate the July 31 setup
Attention has now shifted to Deribit’s monthly July 31 expiry. The $70,000 and $72,000 strikes together hold nearly $5 billion in open interest, about 18% of the exchange’s full $28 billion bitcoin options book. Calls dominate at both strikes.
As of July 20, around 27,000 contracts were sitting at $70,000 and about 21,000 at $72,000.
One structure makes up a large part of that interest. Deribit Chief Commercial Officer Jean-David Péquignot described a single large trade that bought 20,000 $70,000 calls and sold 20,000 $72,000 calls, with combined notional value of about $2.5 billion.
If bitcoin finishes above $70,000, the position makes money. Once BTC is above $72,000, the payoff stops growing. The cost of putting on the trade is lower than buying the lower-strike call outright because selling the higher-strike call offsets part of the premium. Whoever put it on was paying for a specific upside move in a specific time window, not an unlimited rally.
The timing sits after a bill debate and just after the Fed meeting
That window is not arbitrary. Jimmy Yang of institutional liquidity provider Orbit Markets linked demand for July 31 upside exposure to expectations that the CLARITY Act would pass, even as traders had been cutting positions.
Polymarket now prices the probability of passage in 2026 at about 35%, down from above 80% in February. A combined banking-agriculture bill had removed ethics language sought by Democrats, prompting formal opposition from Senators Chris Murphy, Chris Van Hollen and Jeff Merkley. The August recess also leaves the Senate with a narrow window to act.
The July 31 expiry also lands two days after the Federal Open Market Committee decision. The FOMC is scheduled to meet on July 28 and 29, with its statement due Wednesday at 2:00 p.m. Eastern time. Kevin Warsh is set to hold a press conference half an hour later.
There will be no updated economic projections attached to this meeting, which leaves the wording of the statement carrying the signal. Rates have been held at 3.50% to 3.75% for four straight meetings. Futures markets assign roughly one-third odds to a 25-basis-point hike, while the chance of a cut is effectively zero.
Governor Lisa Cook pointed to inflation at 3.7%, and Vice Chair Philip Jefferson and Governor Christopher Waller have both warned that policy may need to be reconsidered if price pressures remain elevated.
Deribit’s own probabilities still leave the target looking distant
For the $70,000 strike to finish in the money, bitcoin would need to rise about 9% in six days. Deribit’s own probabilities put the chance of BTC merely touching $70,000 in July at 14.5%, and the chance of touching $72,000 at 4.1%.
Gamma exposure, a measure of how aggressively dealers may need to adjust hedges as price moves, is concentrated at $65,000 and $72,000. The near-dated cluster sits close to the top of the current market and is relatively small. The larger cluster is far enough away that it offers little pull unless bitcoin closes most of the distance on its own first.
That leaves the market in a fairly plain position. The largest expression of conviction in bitcoin options is clustered around a price zone that the market itself gives less than a one-in-six chance of reaching, and the contracts expire 48 hours after a central bank meeting that few traders can model with certainty.
The two weekly expiries that drew so much attention this month have already settled, and little changed. Bitcoin’s range now looks less like an options story and more like a spot-demand story. Over the past week, there simply were not many buyers willing to show up.