Author: CryptoSlate
Compiled by: Deep Tide TechFlow
Deep Tide Introduction: For the entire month of July, traders blamed the options wall for locking Bitcoin in place. But the wall has been dismantled twice, and the price hasn't budged. Now, a $2.5 billion bullish options bet is about to expire, with Bitcoin still 9% away from its $70,000 target. The real issue isn't options suppression, it's that fundamentally, no one is buying.
Traders have had a great excuse all July for why Bitcoin isn't moving: dense options contracts were boxing the price in. They believed that the market makers selling these contracts would buy on dips and sell on rallies to balance their books. Once the contracts settled, Bitcoin would finally be free to move.
Now, contracts have settled on two consecutive Fridays, and Bitcoin is still stuck. On Saturday, it traded just below $64,000, ending a week where it failed to hold $66,000 and fell back to a price level that was theoretically "protected." That great excuse has expired, leaving a boring truth: demand for Bitcoin is weak, and both buyers and sellers are scarce.
The Options Number Everyone Watches, and What It Actually Tells You
Approximately 19,000 Bitcoin options expired on Deribit at 08:00 UTC on Friday, valued at about $1.2 billion. Deribit handles the majority of cryptocurrency options trading. The exchange set the maximum pain point for this expiry at $64,500. Bitcoin closed the day at $64,140, about $360 below max pain, having opened at $65,099 and touched an intraday low of $63,740.
The previous Friday, the max pain for a similarly sized expiry was $63,000, and Bitcoin rallied towards $65,400 in the following days. Two expiries, two opposite outcomes, and in neither case did max pain appear to pull the price anywhere obvious.
Max pain is a number cited weekly as if it were a force in itself. An option is a contract giving someone the right to buy or sell Bitcoin at a set price on a set date, and max pain is simply a price—the price at which those who sold the contracts would have to pay out the least at settlement. It's a snapshot of where bets are piled up, calculated from current open interest. There's no mechanism pushing price towards it.
The $1.2 billion figure needs similar context. That's the notional value of Bitcoin the contracts reference, and the actual money at risk is only a fraction of that. We also can't confidently say which direction market makers were forced to hedge into settlement, as exchange data shows how many contracts are at each strike price, not who holds which side.
Confident assertions about market maker positioning are almost always based on assumptions that have become expensive as the options market has grown. Ethereum contributed another $234 million to Friday's settlement, with max pain at $1,875 and a put-call ratio of 1.29, showing consistent demand for downside protection throughout the month.
What actually happened on Friday is easy to see in trade data. CryptoQuant's all-exchange data tracks which side of the market is crossing the spread to execute—a decent measure of who's in a hurry.
Traders holding leveraged long positions were forced to liquidate $45.9 million on Friday, compared to just $7.4 million on the short side—a roughly six-to-one imbalance.
Leverage itself remains subdued. The funding rate—the fee leveraged longs pay to shorts to keep positions open—averaged a cross-exchange 0.0038% on Friday, down from 0.0064% five days ago, virtually neutral. Futures and perpetuals open interest closed at $22.35 billion, up from $21.26 billion at the previous expiry settlement. Even as the price fell 1.5% on Friday, open interest was rising. New positions were entering on the dip.
U.S. spot Bitcoin ETFs saw outflows of $225.2 million on Thursday, ending a seven-session streak that had attracted nearly $1 billion, with BlackRock's IBIT accounting for $202.5 million of the reversal. But the week still ended with roughly $274 million in net inflows.
Renewed tensions between the U.S. and Iran pushed equities lower into the weekend and dragged down crypto; the Crypto Fear & Greed Index dropped three points to 28, and implied volatility slid towards 35%.
The Big Bet Still Alive, 9% Away from Target
Deribit's order book holds nearly $5 billion in open interest at the $70,000 and $72,000 strike prices for the July 31 monthly expiry, accounting for about 18% of the exchange's entire $28 billion Bitcoin options book. Call options dominate at both strikes. As of July 20, roughly 27,000 contracts sit at $70,000 and about 21,000 at $72,000.
A single structure makes up a large portion of this. Deribit Chief Commercial Officer Jean-David Péquignot described a single, large order: buying 20,000 call options at $70,000 and selling 20,000 call options at $72,000. This combination has a total notional value of around $2.5 billion across both legs.
The trade is profitable if Bitcoin closes above $70,000, with gains capped once it surpasses $72,000. The upfront cost is lower than simply buying the lower strike because selling the higher strike offsets part of the premium. Whoever put this on wants a specific rally within a specific timeframe and is paying for it.
That timeframe has a reason. Jimmy Yang of institutional liquidity provider Orbit Markets links the July 31 call demand to expectations for the CLARITY Act to pass, though traders have been scaling back positions.
Polymarket now prices the probability of passage by 2026 at around 35%, down from over 80% in February, after the merged banking-agriculture draft removed the ethics provisions demanded by Democrats, drawing formal opposition from Senators Chris Murphy, Chris Van Hollen, and Jeff Merkley. The August recess leaves a narrow window for Senate action.
The expiry also lands two days after the Fed's decision. The FOMC meets on July 28 and 29, with the statement due at 2 p.m. ET on Wednesday, followed half an hour later by Kevin Warsh's press conference.
This meeting isn't accompanied by economic projections, so the statement's wording carries the full signaling load. Rates have been held at 3.50% to 3.75% for four consecutive meetings, with futures markets pricing in roughly a one-in-three chance of a 25-basis-point hike and effectively zero chance of a cut.
Governor Lisa Cook noted inflation at 3.7%, while Vice Chair Philip Jefferson and Governor Christopher Waller both warned policy could be reconsidered if prices stay elevated.
Bitcoin needs to gain about 9% in six days for the $70,000 strike to be in the money, and Deribit's own probabilities price the chance of Bitcoin merely touching that level during July at 14.5%, and $72,000 at 4.1%.
Gamma exposure—a measure of how aggressively market makers must adjust their hedges as price moves—is concentrated at $65,000 and $72,000. The near cluster sits right at the market's top and is quite small. The large cluster is far enough away to have little pull until Bitcoin covers most of the distance itself.
So the biggest concentration of conviction in Bitcoin's options market is parked at a price the market gives itself less than a one-in-six chance of touching, and it expires 48 hours after a central bank meeting no one can confidently predict.
The two weekly expiries that sucked up all the attention this month have settled, and nothing changed. Bitcoin's range belongs to whoever shows up in the spot market, and in the past week, few have.
