Bitcoin options worth $10 billion expired on July 31 with maximum pain concentrated at $64,000, as reported by CoinDesk. The settlement represented approximately 30% of outstanding Bitcoin contracts, with 149,000 Bitcoin options expiring and a 0.28 put-call ratio showing that call open interest greatly exceeded put open interest. Bitcoin traded near $63,800 shortly after settlement, remaining within the recent range despite call-heavy monthly positioning. Ether options worth $830 million also expired with 435,000 contracts and a 0.63 put-call ratio, with Ether trading around $1,891 after settlement. The expiry coincided with the Federal Reserve's July 29 decision at 2:00pm ET and the July monthly candle closing, adding to market uncertainty as traders positioned for potential policy changes. Together, more than $10.4 billion in crypto options were cleared during a single session, marking the largest single-day options expiry in recent months.
The options market is reflecting a major shift in positioning as July ends with a bearish mood for August, according to CoinDesk analysis. Since 2013, July has produced a median return of 8.61%, with the price rising by 8.9% this month, but a positive July is usually followed by a negative August, producing a median return of -7.51%. The $60,000 put, or protection against a price decline, is the new leader with an OI built up of $1.17 billion, replacing the previous leaders $70,000 and $72,000 calls which had notional open interest of $2.5 billion each. Notional open interest on the $70,000 call has fallen to $943 million, and on the $72,000 call to $888 million, while still significant, those levels are well below the $60,000 put. This shift in positioning suggests traders are hedging against potential downside rather than betting on further upside, with the 15% probability of a July Federal Reserve rate increase providing a defensible base case for the current bearish positioning.
Bitcoin options traders have significantly reduced their downside hedges since late June, with the put/call open-interest ratio falling to approximately 0.52 from 0.76. According to reports from Glassnode, this shift represents traders stepping back from hedging rather than adding to it. The 25-delta skew has dropped to around 4% at the one-week tenor while three- and six-month contracts maintain higher levels at 11% to 12%, indicating traders are still paying for insurance against potential problems later this year but have largely stopped purchasing near-term protection. Recent data shows approximately 19,000 Bitcoin options expired on Deribit at 08:00 UTC on Friday, valued at around $1.2 billion, with the largest pain point identified at $64,500, where Bitcoin closed at $64,140. Derivatives markets now show that open interest has stabilized after earlier expansions, and funding rates have hovered near neutral, suggesting neither aggressive long nor short positioning dominates.
Short-dated options show much lower demand for near-term protection than for three- to six-month tenors, signaling traders view this week as calmer even as they insure against turbulence later in the year. As reported by Glassnode, calls are gaining share and large traders have been accumulating $70,000 strike calls and bull call spreads, signaling expectations of upside in the spot price. The 15% probability of a July Federal Reserve rate increase provides a defensible base case for the low near-term pricing strategy. However, leverage itself remains subdued with funding rates averaging 0.0038% across exchanges, down from 0.0064% five days prior, indicating reduced market conviction. Coinglass data shows that Bitcoin has reclaimed and defended the mid-$60,000s level, with the cryptocurrency trading near $65,300 and maintaining a market capitalization of $1.31 trillion with 58% dominance.
Implied volatility is compressed across the curve at 34.3% for one week against 40.8% for six months, with an upward slope indicating the immediate future appears calmer than the distant outlook. According to Glassnode analysis, this is not the typical pattern ahead of a scheduled macro event. The thin positioning leaves limited cushion if Wednesday's Federal Reserve decision or projections surprise investors, with such positioning often amplifying moves rather than absorbing them. Deribit's Chief Business Officer noted that nearly $5 billion in open interest sits on 70,000 USD and 72,000 USD strike prices for monthly expiries on July 31, accounting for approximately 18% of the exchange's entire $28 billion Bitcoin options book. Options activity has shown interest in upside calls targeting levels toward $70,000–$72,000 into month-end, yet protective puts remain active as hedges against any hawkish surprise from the Fed. Greeks.live assessed that "the conditions for a rally are not in place," citing limited capital inflows and weak follow-through when U.S. equities rebounded.
