Bitcoin Volatility Hits 100% Ahead of $2.6B Options Expiry

More than $2.6 billion worth of Bitcoin and Ethereum options are set to expire, a development that could reshape short-term price dynamics as traders unwind hedges and reposition.

The event comes amid elevated volatility, defensive positioning, and growing evidence that institutional participants are actively hedging downside risk.

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Bitcoin and Ethereum Options Expiry Could Trigger Volatility as $2.6 Billion in Contracts Settle

Data from derivatives markets shows Bitcoin accounts for the bulk of the expiry, with roughly $2.2 billion in notional value tied to contracts. Ethereum represents an additional $419 million, bringing the combined total to more than $2.6 billion.

Bitcoin is currently trading near $64,686, significantly below its max pain level of $80,000, the price at which the greatest number of options would expire worthless.

Total open interest stands at 33,984 contracts, including 21,396 calls and 12,588 puts, resulting in a put-to-call ratio of 0.59.

Ethereum, meanwhile, is trading around $1,905, also below its $2,400 max pain level. Total open interest stands at 219,034 contracts, with call open interest of 113,427 and put open interest of 105,607.

The put-to-call ratio of 0.93 suggests a more balanced, yet still cautious, positioning compared with Bitcoin.

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The gap between spot prices and max pain levels suggests that option sellers could benefit if prices remain suppressed into expiry. Meanwhile, traders holding directional bets may face losses if markets remain range-bound.

Notably, today’s expiring options are significantly lower than the $8.8 billion contracts that settled last Friday, because the January 30 event was for the month.

Institutions Hedge as Volatility Climbs

Nevertheless, analysts at Greeks.live say derivatives markets are showing clear signs of stress and repositioning, with volatility rising sharply and traders moving to protect portfolios.

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According to the analysts, options data indicate institutions and large players are urgently hedging and placing bets.

Bitcoin’s current-month implied volatility (IV) has surged to 100%, doubling since the start of the year, while the main contracts’ IV has also breached 50%, climbing 15% over two weeks.

With skew at a two-year low, the experts say options market structure is now entirely dominated by bearish sentiment, though some lottery-style buying of deeply out-of-the-money options has emerged.

Indeed, the market is in panic mode, and with good reason, as the Bitcoin price steadily edges toward the $60,000 psychological level.

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The surge in implied volatility to 100% highlights the scale of uncertainty currently priced into Bitcoin markets, reflecting expectations of larger-than-normal price swings.

Expiry Could Reset Market Flows

Elsewhere, Deribit analysts note that options positioning is clustered around key strike levels, which may be influencing price behavior ahead of expiry.

The options expire at 08:00 UTC on Deribit. If those dynamics play out, markets could see increased volatility immediately after expiry as hedging flows unwind and liquidity conditions shift.

While bearish sentiment currently dominates derivatives positioning, panic-driven markets can sometimes produce sharp rebounds, particularly if large liquidations clear excess leverage.