Options Expiration on BTC and ETH on July 25: Market Analysis and Key Levels

The Scale and Significance of the Upcoming Expiration

On July 25, the Deribit exchange will see the expiration of options contracts for Bitcoin (BTC) and Ethereum (ETH) with a total nominal value of around $15.4 billion. This is one of the most significant events in the cryptocurrency market this year, capable of influencing the short-term price dynamics of leading digital assets. The expiration is scheduled for 08:00 UTC (11:00 MSK), and investors around the globe are closely monitoring how such a large settlement of derivatives will impact the prices of BTC and ETH.

• Total Expiring Options Volume (nominal): ~$15.4 billion
• Bitcoin (BTC): ≈ $12 billion, key strike ~ $112,000
• Ethereum (ETH): ≈ $3 billion, key strike ~ $2,800
• Put/Call Ratio: ~0.92 (BTC); ~0.87 (ETH)
• Expiration Time: July 25, 08:00 UTC (11:00 MSK)

The Role of Deribit as the Dominant Options Exchange

Deribit is the largest platform for trading cryptocurrency options, accounting for over 85% of the global market for these derivatives. Nearly all global activity in Bitcoin and Ethereum options is centralized on Deribit, which means events on this exchange effectively set the tone for the entire crypto derivatives market. Major players, including hedge funds and family offices, use Deribit for hedging risks and speculating on BTC and ETH prices, leading to record levels of open interest.

The fact that total open interest has reached multi-billion dollar values for a single expiration date reflects increased investor engagement. The growing interest in cryptocurrency options signals a gradual maturation of the market: derivatives are increasingly being used for risk management strategies and profit generation, and trading volumes are regularly setting new highs.

Bitcoin: Open Interest and Key Strike of $112,000

The lion's share of the upcoming expiration pertains to Bitcoin-linked options. According to Deribit, contracts for BTC worth approximately $12 billion will expire on July 25. The structure of open interest shows a moderate predominance of call options over put options: the put/call ratio stands at around 0.92, indicating that the volume of call bets (betting on price increases) slightly exceeds the volume of put bets (betting on price declines). This suggests a slightly bullish sentiment among market participants ahead of the expiration.

The focus is on the strike price of approximately $112,000 for BTC—this price point has the highest concentration of interest for the expiring options. In other words, $112,000 serves as a rough "maximum pain" level for this expiration: at this price, the largest number of options (both call and put) would expire worthless. Option sellers would achieve maximum profit if the price is close to $112,000 at the time of settlement. Some analysts note the "gravity effect"—the tendency for prices to gravitate towards such key levels as the expiration date approaches. Nonetheless, the actual behavior of BTC will also depend on external factors: strong market trends or news can overshadow the influence of option levels.

Ethereum: Bets on Growth and the Threshold of $2,800

Options on Ethereum represent a smaller yet still significant part of the July 25 expiration—about $3 billion in nominal terms. The dynamics of positions are similar to those of Bitcoin: the put/call ratio for ETH is around 0.87, indicating a notable predominance of call options. Traders in Ethereum options are generally optimistic, with a majority betting on ETH price increases.

The greatest accumulation of open interest for Ethereum is observed around the strike price of approximately $2,800. This level can be considered the "pain point" for Ethereum options: if the price of ETH approaches $2,800, most of the option contracts would expire worthless. However, the ETH market is currently trading well above this level, so many call options are already in profit for holders. Option sellers would benefit from a price retracement closer to $2,800 by the time of expiration, whereas maintaining the price above this level would ensure substantial profits for call option holders. The balance of power between bulls and bears around this level will be one of the intriguing aspects of the upcoming expiration.

Volatility Surrounding Expiration

Such a large-scale event as the expiration of options worth over $15 billion traditionally accompanies increased market volatility. In the days and hours leading up to the expiration, sharp price movements may occur as market participants readjust their positions. Holders of profitable options may take profits by selling the underlying asset or rolling their positions to longer expiration dates. Conversely, those whose bets are out of the money may open new trades in hopes of recovering losses. This portfolio reshuffling creates spikes in volume and may temporarily intensify price fluctuations.

There is a concept known as "max pain," which suggests that the market tends to gravitate towards the price level that is most inconvenient for option holders (and most profitable for their sellers) by the time of expiration. In this instance, these levels are estimated around $112,000 for BTC and $2,800 for ETH. However, market reality rarely follows theory exactly. Prices are influenced by external factors: macroeconomic news, liquidity inflows or outflows, regulatory decisions. If the overall trend for Bitcoin and Ethereum remains strong, it may continue despite the "magnet" of option levels. Nevertheless, the mere fact of a significant expiration can amplify short-term uncertainty and serve as a catalyst for impulsive price movements.

Actions of Participants and Hedging Strategies

Experienced traders and investors typically prepare in advance for the expiration period, especially when it involves such significant volumes. There are several approaches available to mitigate risks:

• Hedging Positions: Market participants concerned about a potential unfavorable outcome may purchase protective put options or futures contracts to offset potential losses from price movements against their underlying assets.
• Setting Stop-Losses: Traders with significant spot positions in BTC or ETH often set stop-loss orders prior to the expiration date to automatically limit losses in case of a sudden spike in volatility.
• Gradual Position Closing: Large holders (for instance, institutional investors) avoid liquidating or covering large volumes at the last minute. Instead, they break their exit from the position into stages or preemptively "roll over" options to later dates to avoid provoking sharp market movements.

Analysts emphasize that emotional decisions should not be made during the expiration period. Volatility during derivatives settlements is a common occurrence in financial markets. Despite potential price spikes, fundamental factors (macroeconomic conditions, technology adoption, etc.) continue to play a decisive role in the long-term assessment of Bitcoin and Ethereum. Therefore, it is important for long-term investors to separate the short-term "noise" caused by derivatives from actual trends. Conversely, short-term traders may use volatility spikes as opportunities for active trading, strictly adhering to risk management principles.

Conclusion

The upcoming expiration of options on July 25 serves as a test for the maturity of the cryptocurrency market. Its scale demonstrates how much interest in derivative instruments has grown: just a few years ago, such figures seemed incredible. Now, monthly expirations in the range of $10-15 billion have become the new norm, reflecting the influx of capital and trust in crypto assets from a broader audience of investors.

The outcomes of this expiration will provide valuable insights for market participants. If BTC and ETH prices remain significantly above the "max pain" levels, it would confirm the prevailing bullish sentiment and the strength of the current rally, despite attempts by options players to slow growth. Conversely, if a retracement closer to the levels of $112,000 or $2,800 occurs by the expiration date, one could conclude that option sellers managed to influence short-term price dynamics or that the overall market sentiment shifted toward correction.

In the long term, the increasing role of derivatives makes the crypto market both more flexible and more complex. Major expirations are likely to continue inducing short-term fluctuations; however, as liquidity grows, their effects may be smoothed out. For investors, the key takeaway is that derivative instruments have firmly established themselves among the drivers of price movements. Keeping track of the expiration timelines for Bitcoin and Ethereum options is now as important as monitoring fundamental news—especially during periods when billions of dollars are at stake, and the outcome between bulls and bears is literally decided in a single day.