By month-end, bitcoin options valued at $7.8 billion will expire on the Deribit platform.

Bitcoin (BTC) options totaling $7.8 billion are set to expire at the end of January, with a significant portion of them potentially expiring out of the money, as per data from Deribit. The expiration comes at a time when bitcoin’s price is well above the “max pain” point, leading to speculation that market makers might push the price down to maximize their profits.

Approximately $6 billion worth of notional value in bitcoin options is set to expire worthless, with a large share being put options. These options give holders the right to sell BTC at a specific price, and as expiration nears, the price tends to gravitate toward the max pain point. For this batch of options, the max pain level is at $98,000, a price level that traders will be closely monitoring.

Luuk Strijers, CEO of Deribit, commented, “We expect significant market dynamics around the $98k max pain level as the expiry date approaches. The recent regulatory changes, such as the allowance for banks to custody bitcoin, and the speculation about a strategic bitcoin reserve, are also creating additional market anticipation.”

Strijers also highlighted that the upcoming expiry on Friday represents a major event, with about 74,000 BTC options contracts set to expire. Out of the total $28 billion in BTC options open interest, $7.8 billion worth of options will expire, and around 22.6% of these are in-the-money (ITM), which could trigger hedging activity in the market. The Deribit Volatility Index (DVOL) is hovering around 60, reflecting heightened volatility as bitcoin approaches new all-time highs.