Bitcoin Slides Far Below $72K “Max Pain” Level Ahead of $10B Options Expiry

Bitcoin’s sharp drop ahead of Friday’s quarterly options expiry has once again challenged the widely followed “max pain theory,” as the asset trades well below the expected $72,000 pinning level.

The cryptocurrency’s decline to around $61,700 has raised doubts about the idea that prices naturally gravitate toward max pain ahead of large expiries, especially with about $10 billion in options set to settle on Deribit at 8:00 ET on Friday.

Max pain refers to the price point where options holders—buyers of calls and puts—suffer the greatest losses at expiry, while option sellers or writers benefit the most.

The theory suggests that, ahead of expiry, option writers may influence spot prices toward that level, effectively “pinning” bitcoin near max pain. This idea gained traction in crypto circles after repeated instances in 2020–2021 when BTC appeared to drift toward max pain levels before monthly and quarterly settlements.

However, this week’s slide from around $67,000 to below $60,000 runs counter to that narrative, occurring just days before the major settlement.

The move also echoes skepticism from options market veterans like Tony Stewart of Pelion Capital, who has long questioned the practical influence of max pain dynamics in crypto trading.

In addition, recent expiries have shown little evidence of strong price pinning effects, further weakening the theory’s perceived reliability.

“Friday’s expiry is something to keep an eye on with $10.2 billion rolling off Deribit with max pain at $72,000, well above spot,” said Jasper De Maere of Wintermute. “Despite the narrative, recent expiries haven’t mechanically pinned prices the way people expect.”

Still, the event remains significant, with Deribit calling it one of the largest liquidity moments of the year as billions in contracts expire or roll into new positions, often contributing to increased market volatility.