bitcoin has surpassed $110,000, driven by renewed optimism about trade relations between the United States and China. The bounce means BTC is now trading at levels where market makers could add to the price turbulence ahead of Friday’s multi-billion dollar options expiry.
Data from the options market listed on Deribit, tracked by Amberdata and Deribit Metrics, shows that $13 billion in bitcoin options (calls and puts) will expire on Friday. In particular, traders and market makers have negative gamma exposure to the $100,000 and $111,000 strike prices, meaning they have sold (written) more options than they have bought at these levels.
In such scenarios, market makers hedge their positions by trading with the market (buying when prices rise and selling when prices fall) to maintain a net delta (market) neutral exposure.
Their hedging activity typically intensifies as maturity approaches. This is because gamma sensitivity increases as expiration approaches, especially for at-the-money (ATM) or near-the-money options, such as those at the $110,000 and $111,000 strike prices.
The chart shows that the dealer gamma is largely negative between $105,000 and $111,000, indicating a possibility of further trading activity around these levels.
Beyond this range, gamma exposure becomes net positive at $114,000.
All told, bitcoin’s next big move may come less from fundamentals than from options traders’ mechanical hedging flows.
