Bitcoin Options Expiry Exposes Bearish Edge Below $90,000

Key Insights:

• Bitcoin price traded near $89,000 as $10.8 billion BTC options expiry approached on Jan. 30.
• Put options outweighed calls below $90,000, giving bears a clear mathematical edge.
• On-chain data showed rising supply in losses, hinting at an early bear-market structure.

Bitcoin price hovered near $89,000 as traders braced for a $10.8 billion Bitcoin options expiry on Jan. 30. Despite repeated rebounds from $87,000, derivatives data showed bears held a clear edge below $90,000. Options positioning suggested limited conviction behind a breakout toward $95,000.

The Bitcoin options expiry mattered because it tested whether recent price stability reflected strength or hesitation. Data from Deribit showed call options dominated open interest, yet strike placement told a different story. Below $90,000, bearish strategies remained better positioned mathematically.

Bitcoin Options Positioning Favored Bears Below Key Levels

Deribit data showed $6.6 billion in call options open interest versus $4.2 billion in puts. At face value, calls exceeded puts by 57%, but strike distribution weakened that signal. Less than 17% of Jan. 30 call interest sat below $92,500, limiting bullish exposure near current prices.

Bitcoin price traded as low as $84,000 over the past two months, according to market data. Calls at $70,000 and below likely reflected complex hedging structures rather than outright upside bets. Deribit pricing showed that such deep out-of-the-money calls remained costly for directional traders.

A $70,000 Bitcoin call expiring Feb. 27 traded near 0.212 Bitcoin, Deribit data showed. By contrast, an $80,000 call cost roughly 0.109 Bitcoin. This gap explained why traders preferred strikes closer to spot rather than deep discounts.

Calls at $110,000 and higher traded below 0.002 Bitcoin, or about $180. Such contracts attracted little interest due to low probability payouts. Analysts typically viewed them as speculative or part of covered call strategies rather than bullish conviction.

Covered Calls Skewed Bullish Appearances

A large share of calls above $100,000 reflected covered call strategies, according to derivatives data. In these trades, sellers collected premiums while holding underlying Bitcoin. Profit upside remained capped, reducing their value as bullish indicators.

Deribit showed $850 million in call interest clustered between $75,000 and $92,000. To assess control into expiry, traders compared this with put exposure near current prices. Put options often revealed downside hedging or neutral positioning.

Put open interest between $86,000 and $100,000 totaled $1.2 billion on Deribit. Even excluding puts above $102,000, bearish exposure outweighed bullish payoff scenarios below $90,000. This imbalance shaped expectations into the expiry window.

Scenario modeling reinforced the bearish skew. Between $86,000 and $88,000, puts held a $775 million advantage. Between $88,001 and $90,000, bears still led by $325 million, according to Deribit estimates.

Only above $90,001 did calls gain a net edge, totaling $220 million. As long as Bitcoin price remained below $90,000, options math favored sellers. Traders closely watched spot price behavior as settlement approached.

Supply in Loss Metric Turned Higher

On-chain data added pressure to the cautious outlook. Bitcoin’s Supply in Loss percentage began trending upward again, according to historical cycle data. Analysts noted similar shifts preceded bear market phases in 2014, 2018, and 2022.

In prior cycles, Supply in Loss rose before price reached final bottoms. Losses gradually spread from short-term holders to longer-term participants. True market lows formed only after broader capitulation emerged.

Current readings remained well below historical capitulation levels. Still, analysts said the directional change carried weight. The metric suggested a transition toward bear market structure rather than a brief pullback.

This interpretation aligned with muted upside conviction in options markets. Traders appeared reluctant to chase higher strikes while hedging downside risks. The combination pointed to caution rather than panic.

Binance Fund Flow Ratio Showed No Panic Selling

Exchange flow data offered a counterbalance to bearish signals. Binance’s Fund Flow Ratio hovered near 0.016, according to on-chain analytics. Historically, higher readings coincided with market tops or sharp corrections.

The low ratio indicated limited Bitcoin inflows to exchanges relative to network activity. Analysts said this behavior suggested an absence of widespread selling intent. Large holders appeared content to wait rather than distribute aggressively.

Bitcoin traded near $89,000 despite the subdued flow ratio. Past market peaks showed sharp increases as assets moved rapidly toward exchanges. The current pattern reflected controlled supply conditions.

Analysts also linked the ratio to liquidity absorption. Reduced inflows implied constrained immediate sell-side supply. Without new catalysts, the probability of a sharp near-term decline appeared limited.

As the Bitcoin options expiry approached, price levels took center stage. Below $90,000, bearish strategies retained a measurable edge. A sustained move above that level shifted payoff dynamics toward call holders.

The $87,000 zone remained a key support, having absorbed multiple pullbacks over two months. Failure to hold that range risked validating bearish options positioning. Above $92,000, bullish exposure increased but lacked depth.

Traders watched the settlement closely for directional cues. Bitcoin options outcomes, on-chain metrics, and exchange flows painted a market marked by restraint rather than momentum. For now, Bitcoin’s next move hinged on whether the spot price could escape the $90,000 ceiling.