Bitcoin Faces $10.5B Options Expiry With Puts in Control Unless Price Rallies 9%

Bitcoin is approaching a critical monthly options expiry on February 27, 2026, with approximately $10.5 billion in notional open interest set to settle, as current market structure favors put (sell) options despite higher overall call (buy) volume.

Data shows that 88% of call options will expire worthless if Bitcoin remains below $70,000, while a $490 million concentration at the $40,000 put strike highlights significant downside hedging demand. Bulls would need a 9% rally from current levels near $68,800 to shift the advantage, with outcomes highly sensitive to Bitcoin’s 90% correlation with the Nasdaq 100 Index and broader tech sector sentiment.

Options Market Structure and Key Metrics

The February monthly expiry represents one of the largest derivatives events in recent months, with total open interest distributed across major exchanges. Deribit leads with $4.5 billion in call options and $3.4 billion in put options, representing 76% of the aggregate market. OKX follows with $610 million in calls and $385 million in puts, while CME rounds out the top three with $255 million in calls and $287 million in puts.

At first glance, aggregate put open interest appears 25% lower than equivalent calls, suggesting a bullish bias. However, a more granular analysis reveals that neutral-to-bullish strategies were caught off guard by Bitcoin’s sharp decline below $75,000 in early February. Approximately 88% of call options on Deribit will expire worthless if the Bitcoin price remains below $70,000 on Friday.

Even when discarding calls targeting $105,000 and higher—typically part of complex multi-leg strategies with lower acquisition costs—only 37% of the remaining bets sit below $75,000. This effectively reduces the viable call open interest on Deribit to roughly $780 million.

Put Positioning and Downside Protection

Despite the call-heavy aggregate numbers, put options reveal significant bearish positioning. A notable $1.44 billion in put open interest on Deribit targets Bitcoin prices below $60,000. More strikingly, the $40,000 put strike has emerged as the second-largest position by open interest, representing approximately $490 million in notional value and underscoring strong demand for deep tail-risk hedges following the recent selloff.

This concentration at lower strikes reflects a market dynamic where traders maintain upside exposure while simultaneously hedging against further downside. The put-to-call ratio stands at approximately 0.72, indicating that while calls still outnumber puts overall, the sizeable put positions at lower strikes reveal clear demand for crash protection.

Put options at $72,000 and above total $1.15 billion in open interest on Deribit, sufficient to offset existing call options. As long as Bitcoin remains below $75,000, the advantage continues to favor put instruments.

Bitcoin-Tech Correlation and Macro Factors

The current 90% correlation between Bitcoin and the Nasdaq 100 Index provides clear evidence that tech sector sentiment is the leading driver of trader confidence. This near-perfect positive link means Bitcoin is now moving almost in lockstep with technology stocks, behaving as a leveraged risk asset rather than a portfolio diversifier.

Bitcoin’s 90-day correlation coefficient with the Nasdaq-100 has reached elevated levels compared with its historical relationship to gold, highlighting a move away from its early “digital gold” positioning. Institutional adoption since 2021 has increased Bitcoin’s sensitivity to macroeconomic factors such as interest rate expectations, inflation data, and overall risk appetite.

The relevance of Nvidia’s earnings outcome, announced after U.S. market close on Wednesday, remains significant for risk markets. The success of the artificial intelligence sector, particularly the sustainable operational margins of the world’s largest companies, continues to influence trader sentiment across asset classes. While Bitcoin’s correlation with the stock market may not persist indefinitely, the fate of Friday’s $10.5 billion options expiry could be determined by stock market performance.

Market observers note that the current divergence—where the Nasdaq remains buoyant while Bitcoin trends downward—signals potential stress in dollar liquidity. Bitcoin has been characterized as a “global fiat liquidity fire alarm,” reacting more quickly and sensitively to shifts in fiat credit conditions than traditional equities.

Price Scenarios and Max Pain Analysis

The $75,000 strike represents the current max pain level, with approximately $566 million in open interest concentrated at this price. Max pain refers to the price at which the greatest number of options expire worthless, minimizing payouts to buyers. With spot price trading below $75,000, a move higher into expiry could reduce losses for call sellers.

Based on current price trends near $68,800, three probable outcomes for Friday’s BTC options expiry on Deribit have been identified:

• Between $65,000 and $69,000: The net result favors put instruments by approximately $1.15 billion

• Between $69,001 and $71,000: The net result favors put instruments by approximately $845 million

• Between $71,001 and $74,000: The net result favors put instruments by approximately $470 million

Bitcoin bulls need a 9% rally from the present $68,800 level to flip the tables on the February options expiry. A move back above $75,000 would be required to shift the advantage meaningfully toward call holders.

FAQ: Understanding Bitcoin’s Options Expiry

Q: What is the significance of the $10.5 billion options expiry for Bitcoin price?

A: Large options expiries can exert short-term gravitational effects on price, especially when significant open interest concentrates near specific strike levels. The settlement may relieve pressure and stabilize markets, but could also catalyze volatility. The current structure favors puts unless Bitcoin rallies 9% to exceed $75,000.

Q: Why is the $40,000 put strike significant despite being far below current prices?

A: The $490 million concentration at the $40,000 put strike represents deep out-of-the-money tail-risk hedges. Such positions indicate traders are protecting against worst-case scenarios while maintaining upside exposure, reflecting market caution despite headline bullish skew in aggregate call/put ratios.

Q: How does Bitcoin’s correlation with the Nasdaq 100 affect the options expiry?

A: Bitcoin’s current 90% correlation with the Nasdaq 100 means tech sector performance heavily influences trader confidence and positioning. With Nvidia earnings and broader AI sector sentiment driving risk markets, the stock market’s direction may determine whether Bitcoin can rally sufficiently to alter the options outcome.

Q: What are the key price levels to watch heading into expiry?

A: Critical levels include $70,000 (where 88% of calls expire worthless), $75,000 (max pain and the threshold for shifting advantage), and support at $65,000-$60,000 where significant put positions are concentrated. The $68,800 current price requires a 9% rally to reach $75,000 and flip the tables on bearish positioning.