Bitcoin $13.8B Options Expiry Creates Critical Test for Bull Market

Major Options Expiry Puts Pressure on Bitcoin Bulls

Bitcoin traders are closely watching a massive $13.8 billion options expiry scheduled for August 29, which could determine whether the cryptocurrency's recent 9.7% correction signals the end of the current bull run or represents a temporary setback. The digital asset dropped to $112,100 on Thursday, marking its lowest point in six weeks and intensifying bearish pressure ahead of the monthly options expiration.

Call Options Outnumber Puts Despite Recent Price Decline

The options market shows $7.44 billion in open interest for call options, which stands 17% higher than the $6.37 billion in put contracts. However, the final outcome depends entirely on Bitcoin's price at 8:00 AM UTC on August 29. Deribit dominates the options market with an 85% share, while CME holds 7% and OKX maintains 3% of the market.

Bullish Strategies Face Significant Challenges Below $114,000

Many Bitcoin bulls positioned themselves for higher prices, with some bets placed at $125,000 or above. This optimism has quickly diminished following Bitcoin's recent decline, creating a shift in momentum toward put instruments. Traders who implemented bullish strategies are likely to face disappointment regardless of the reasons behind the price correction.

Only 12% of call options were positioned at $115,000 or below, leaving most contracts out-of-the-money at current price levels. In contrast, 21% of put options are positioned at $115,000 or higher, with significant concentrations at $112,000. This positioning naturally encourages bears to continue applying downward pressure on Bitcoin's price before the monthly expiry.

Federal Reserve Decision Could Impact Options Outcome

The situation for bullish strategies may not be entirely lost. Market participants are awaiting comments from US Federal Reserve Chair Jerome Powell on Friday, as any indication of increased rate cut probabilities could support asset prices. Thursday's higher-than-expected US jobless claims data has added to this anticipation, maintaining elevated macroeconomic uncertainty.

Five Key Price Scenarios for Options Expiry

Based on current price trends at Deribit, here are five probable scenarios excluding complex strategies like selling put options for upside exposure:

$105,000 to $110,000 Range: $210 million in calls versus $2.66 billion in puts, creating a $2.45 billion advantage for put instruments.

$110,100 to $114,000 Range: $420 million in calls versus $1.94 billion in puts, favoring puts by $1.5 billion.

$114,100 to $116,000 Range: $795 million in calls versus $1.15 billion in puts, with puts maintaining a $360 million advantage.

$116,100 to $118,000 Range: $1.3 billion in calls versus $830 million in puts, giving calls a $460 million advantage.

$118,100 to $120,000 Range: $1.7 billion in calls versus $560 million in puts, creating a $1.1 billion advantage for calls.

Critical Price Level at $114,000 Emerges

For bullish strategies to gain meaningful traction, Bitcoin would need to trade above $116,000 by August 29. However, the most crucial battle appears to be at $114,000, where bears have the strongest motivation to push prices lower.

Macroeconomic Factors and AI Sector Concerns Add Complexity

Bitcoin's performance during the $13.8 billion monthly options expiry will ultimately be determined by broader macroeconomic trends, including growing investor discomfort with artificial intelligence sector spending. Concerns have intensified after Morgan Stanley warned that excessive spending could limit major technology companies' ability to fund share buybacks, increasing caution in equity markets.

Market Outlook Remains Uncertain

The combination of options positioning, Federal Reserve policy expectations, and broader market sentiment creates a complex environment for Bitcoin. While bears currently hold structural advantages below $114,000, potential Federal Reserve policy shifts and macroeconomic developments could still influence the final outcome.

The August 29 options expiry represents a significant test for Bitcoin's bull market resilience, with billions of dollars in contracts potentially influencing short-term price direction. Traders and investors are closely monitoring both technical levels and macroeconomic catalysts that could determine whether Bitcoin can maintain its upward trajectory or faces further consolidation.

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