Bitcoin bears hold the advantage at the expiration of $10.8B options on Friday

Main Receptors:

Unless Bitcoin secures a critical price break above 90,000, our carry options strategies hold the edge.

Traders are using $100,000 call (buy) options as income tools instead of directly betting on a big bitcoin rally.

Bitcoin (BTC) has bounced back from the $87,000 level several times over the past two months, but traders are skeptical about the critical break above $95,000. Friday's $10.8 billion BTC options expiration represents a critical moment for bulls, especially as call options dominate overall market demand.

The total $6.6 billion in call options open interest is 57% higher than the $4.2 billion in (marketable) instruments. However, this does not mean that bulls are in control. As usual, Derbit holds a comfortable lead over its competitors with 78.7% market share, followed by OKX with 6.3%. The Chicago Mercantile Exchange (CME) ranks third with a 5% share.

Interest in call options since Jan. 30 has settled below $92,500 on Deribit, down 17%. Additionally, with Bitcoin's lowest price in two months being $84,000, it is likely that call options at $70,000 and below are being used for complex onchain strategies rather than direct bets for price appreciation. Buying a call option 20% below the current market level is too expensive for most retail traders.

For example, the $70,000 BTC call option for February 27 is currently trading at 0.212 BTC, which is 0.109 BTC higher than the $80,000 call option. This price differential explains why bulls tend to pick options near or slightly above the spot price level. Conversely, BTC call options at $110,000 or more are often ignored, as they cost less than 0.002 BTC (roughly $180).

Bearish Bitcoin options strategies favor below $90,000

A significant portion of the $100,000 and higher call options can be attributed to covered call strategies. In this setup, the seller receives a down payment similar to getting a bond interest. This differs from standard fixed income products because the seller retains the original Bitcoin, although their potential profit is limited. Therefore, these are rarely seen as aggressive indicators.

Call options range from $75,000 to $92,000 for a total of $850 million per Deribit. To determine whether bulls are better positioned for Friday's close, one must compare how options are stacked and assume they are used for low-conservation or neutral strategies. The main indicator is the amount of put options below 70,000 dollars and the price is less than 300 dollars.

Although they are less represented than call options, put instruments cost between $86,000 and $100,000 to $1.2 billion per debit. So, while we don't think the $102,000 and above positions will benefit from a price dip, bearish strategies look better for the January expiration.

Related: Bitcoin's True ‘Uptober' Moment May Begin in February–Here's Why

Below are three possible outcomes for Friday BTC options ending in Derbit, based on current price trends.

Between $86,000 and $88,000: The net result supports fixed (sold) assets of $775 million.

Between $88,001 and $90,000: The net result supports retained (sold) equipment by $325 million.

Between $90,001 and $92,000: The net result supports call (purchase) instruments at $220 million.

As long as Bitcoin price remains below $90,000, the leverage continues to support bearish options strategies.