$23.6B Options Expiry Removes Bitcoin’s Derivative Price Cap, Enabling Normalized Discovery
Approximately $23.6 billion of Bitcoin and Ethereum options expired on March 21, 2025, in one of the largest quarterly expiries of the year. Analysis by Negentropic (run by Glassnode co‑founders Jan Happel and Yann Allemann) indicates the event unwound concentrated options open interest — particularly large call concentrations near $70,000–$75,000 strikes — that had imposed a “structural price cap” via hedging flows. As market makers reduced hedging-related selling pressure, Bitcoin’s spot market can resume cleaner price discovery. Pre‑expiry open interest was roughly $18.5B for BTC options and $5.1B for ETH options. Key technical supports remain near $65,000 and the 50‑day moving average (~$63,500). On‑chain metrics — falling exchange reserves, high hash rate, and accumulation by >100 BTC addresses — and rising institutional participation bolster fundamentals. Traders should note reduced gamma exposure post‑expiry could allow trend development with less choppy, hedge‑driven movement, though expiries can also trigger short‑term volatility. Overall, the removal of the derivatives overhang may shift near‑term drivers from complex hedging flows to supply/demand and macro fundamentals, affecting liquidity, momentum, and trade setups for both spot and derivatives desks.
Bullish
The expiry removed a concentrated options overhang that had created mechanical selling near major call strike levels ($70k–$75k). With roughly $18.5B BTC and $5.1B ETH in open interest unwound, hedging-driven selling and elevated gamma exposure have declined, reducing artificial resistance to upward moves. Supporting factors — declining exchange reserves, strong hash rate, accumulation by large holders, and institutional inflows — reinforce a constructive backdrop. Historically, large expiries that remove derivative overhangs have preceded clearer trend formation (e.g., Dec 2023 breakout); conversely, some past expiries have spawned short-term volatility. Therefore, the medium-term outlook is bullish as price discovery reflects fundamentals rather than hedge dynamics, while traders should remain alert for initial volatility and monitor liquidity, open interest rebuild, and macro catalysts that could modify direction.