On February 26, the cryptocurrency market stands at a critical juncture as the monthly options expiry, valued at $10.5 billion, approaches this Friday. Market analysis suggests that although Bitcoin has recently established a solid double-bottom support near $62,500 and tested weekly highs, the overall price remains approximately 21% below last month's peak. This gives bears a notable technical advantage heading into the large-scale expiration. The clash involving over $10 billion in capital is not only pivotal for short-term price movements but could also serve as a turning point to break the recent bearish sentiment and reignite market confidence.
In the derivatives market, Deribit dominates with a 76% share, where $4.5 billion in call options and $3.4 billion in put options form the core of the battle. While call open interest appears higher on the surface, the reality is unfavorable for bulls. Sharp price declines early in February, which pushed Bitcoin below $75,000, left many call strategies vulnerable. Data indicates that if the price fails to reclaim $70,000 by Friday, nearly 88% of call options on Deribit risk expiring worthless. This deep out-of-the-money status provides bears with considerable leverage in the current setup.
External macroeconomic factors also play a decisive role. Bitcoin currently shows a 90% correlation with the Nasdaq 100 Index, underscoring how tech investor sentiment heavily influences crypto market confidence. In particular, the financial performance of AI sector leader Nvidia has become a barometer for risk assets. Current market pricing suggests that unless Bitcoin stages a strong 9% rally to reclaim the $75,000 level before expiration, bearish positions are poised to secure substantial profits.
Based on current price action, if Bitcoin remains in the $65,000 to $69,000 range, bears could net an advantage of approximately $1.15 billion. Although bulls are attempting to capitalize on the double-bottom rebound momentum, these efforts face significant headwinds in the absence of a strong fundamental catalyst. As a brokerage committed to providing clients with a transparent trading environment, ongoing monitoring of how this options expiry impacts spot market liquidity will be essential for identifying potential trend reversal opportunities amid heightened volatility.