$2.5 Billion Bet on Bitcoin Surging to $70,000, Only 6 Days Left to Cash Out

Author: CryptoSlate

Compiled by: TechFlow

TechFlow Insight: Throughout July, traders blamed option walls for locking Bitcoin in place. But the walls have been dismantled twice, and the price hasn't budged. Now a $2.5 billion call option bet is about to expire, and Bitcoin is still 9% away from the $70,000 target—the real issue isn't option suppression, but that simply no one is buying.

Traders had a good reason throughout July to explain why Bitcoin wasn't moving: dense option contracts boxed the price in. They believed market makers selling these contracts, to balance their books, would buy on every dip and sell on every rally. Once the contracts were cleared, Bitcoin would finally be free to move.

Now contracts have been cleared for two consecutive Fridays, and Bitcoin remains in place. On Saturday, it traded just below $64,000, ending the week—a week where it failed to hold $66,000 and then fell back to levels theoretically supposed to be "protected." That good reason is no longer valid, and the remaining fact is boring: demand for Bitcoin is weak now, and both buying and selling pressure are weak.

The Option Numbers Everyone Is Watching, and What They Can Tell You

Approximately 19,000 Bitcoin options expired on Deribit at 08:00 UTC on Friday, worth about $1.2 billion. Deribit handles most cryptocurrency option trading. The exchange set the max pain for this expiration at $64,500. Bitcoin closed at $64,140 that day, about $360 below max pain, with an opening price of $65,099 and touching $63,740 during the session.

The previous Friday, the max pain for expiring contracts of similar size was $63,000, yet Bitcoin rose towards $65,400 in the following days. Two expirations, two opposite results; in either case, max pain did not obviously exert any significant pull.

Max pain is a number cited weekly as if it were a force in itself. An option is a contract giving someone the right to buy or sell Bitcoin at a set price on a set date, while max pain is just a price—the price at which those selling these contracts need to pay the least money at settlement. It is a snapshot of where bets are piled, calculated based on current open interest. It has no mechanism to push the price towards it.

The $1.2 billion figure needs the same treatment. That is the notional value of Bitcoin referenced by the contracts, while the money truly at risk is only a small fraction of it. We also cannot confidently say which direction market makers were forced to hedge into settlement, because exchange data shows how many contracts are at each strike price, not who holds which side.

Confident assertions about market maker positions are almost always built on assumptions, and the growth of the options market has made such assumptions costly. Ethereum contributed another $234 million to Friday's settlement, with a max pain of $1,875 and a put-call ratio of 1.29, showing demand for downside protection for a whole month.

What really happened on Friday is easy to see in trading data. CryptoQuant's all-exchange data tracks which side of the market is crossing the spread, which is a good indicator of who is in a hurry.

Traders holding leveraged long positions were forced to liquidate $45.9 million on Friday, while the short side was only $7.4 million, an imbalance of about six to one.

Leverage itself remained subdued. Funding rates—the fee leveraged longs pay shorts to keep positions open—averaged 0.0038% across exchanges on Friday, lower than 0.0064% five days ago, almost neutral. Open interest in futures and perpetual contracts closed at $22.35 billion, higher than $21.26 billion at the previous expiration settlement, despite a 1.5% price drop; open interest still rose on Friday. New positions entered during the decline.

U.S. spot Bitcoin ETFs saw outflows of $225.2 million on Thursday, ending a seven-day streak of gains attracting nearly $1 billion, with BlackRock's IBIT accounting for $202.5 million of the reversal. But the week still closed with positive inflows of about $274 million.

Renewed tensions between the U.S. and Iran pushed stocks lower before the weekend and dragged down cryptocurrencies; the Crypto Fear and Greed Index fell three points to 28, and implied volatility slipped towards 35%.

The Bet Still Alive Is 9% Away from the Target

Deribit's book holds nearly $5 billion in open interest at the $70,000 and $72,000 strike prices for the monthly expiration on July 31, accounting for about 18% of the exchange's entire $28 billion Bitcoin option book. Call options dominate at both strikes. As of July 20, about 27,000 contracts were at $70,000, and about 21,000 at $72,000.

One structure accounts for a large part of this. Deribit Chief Commercial Officer Jean-David Péquignot described a single large order, buying 20,000 $70,000 call options and selling 20,000 $72,000 call options, with the combination having a total notional value of about $2.5 billion across both legs.

If Bitcoin closes above $70,000, this trade profits, and once it breaks through $72,000 it stops gaining profit, and the upfront cost is lower than buying the lower strike alone, because selling the higher strike offsets part of the premium. Whoever built this position wants specific gains within a specific time window and paid for it.

There is a reason for this time window. Jimmy Yang of institutional liquidity provider Orbit Markets linked the July 31 call demand to expectations that the CLARITY Act would pass, while traders have been cutting positions.

Polymarket now prices the probability of passage in 2026 at about 35%, down from over 80% in February, after the merged banking-agriculture draft removed ethical clauses required by Democrats and sparked formal opposition from Senators Chris Murphy, Chris Van Hollen, and Jeff Merkley. The August recess leaves a narrow window for Senate action.

The expiration date is also two days after the Federal Reserve decision. The FOMC will meet on July 28 and 29, the statement will be released at 2 PM ET on Wednesday, and Kevin Warsh's press conference is half an hour later.

This meeting comes without economic projections, so the wording of the statement carries all the signal. Interest rates have been maintained at 3.50% to 3.75% for four consecutive meetings, with futures markets assigning about a one-third probability to a 25 basis point rate hike, and the probability of a rate cut effectively zero.

Governor Lisa Cook noted the inflation rate at 3.7%, while Vice Chair Philip Jefferson and Governor Christopher Waller both warned that if prices remain high, policy might be reconsidered.

Bitcoin must rise about 9% in six days for the $70,000 strike price to be in the money, and Deribit's own probabilities set the chance of prices merely touching that level during July at 14.5%, and $72,000 at 4.1%.

Gamma exposure—the metric measuring how aggressively market makers must adjust hedges when prices move—is concentrated at $65,000 and $72,000. The near-term cluster is right at the market top and quite small. The large cluster is far enough away to be almost unattractive before Bitcoin closes most of the distance itself.

So the largest concentration of belief in the Bitcoin options market rests on a price the market gives itself less than a one-in-six chance of touching, and it expires 48 hours after a central bank meeting no one can confidently predict.

The two weekly expirations that attracted all attention this month have settled, and nothing has changed. Bitcoin's range belongs to anyone who shows up in the spot market, and in the past week, few people did.