BTC options signal shift to bearish hedging

BTC options on Deribit went through their first monthly expiry in 2026, serving as an indicator of market sentiment. Positions point to bearish hedging as BTC unraveled to the $82,000 range. 

On Friday, 91,000 BTC options contracts expired with a put-call ratio of 0.48 and maximum pain at $90,000. The contracts had a notional value of $7.6B. Another $1.19B in ETH contracts expired, with a put-call ratio of 0.68. 

The January expiry is the first big event following the rollover from 2025. The notional options expiring today accounted for 25% of open interest, for a total of $9B. Call options dominated, signaling a bearish ratio with protections from a further downside for BTC and ETH. 

As BTC faces uncertain demand and range-bound trading, the options event further sent out a sentiment indicator of bearish expectations. 

Options bring downside protection to $75,000 per BTC

As BTC and ETH entered another downtrend in the past week, signs of fear once again spread on the crypto market. The early 2026 trading followed the unraveling in Q4 2025. For now, BTC finds support at the $80,000 level, while ETH holds above $2,500. 

In the past month, downside protection positions shifted from $85,000 to $80,000. Contracts for the months ahead point to a higher probability for a shift to $80,000, rather than a run to $120,000.

The most numerous contracts are now at the $80,000 psychological level, and another accumulation of put contracts at $75,000 per BTC. The latest market cycle showed elevated options trading activity, as positions aimed for better protection from a bear market. 

The latest options expiry event saw a higher trading volume, mostly due to the new year rollover. Based on Deribit data, market makers and active traders have significant cash reserves and are ready to use options as a form of bearish hedging. 

Will BTC recover after the options expiry?

Historically, BTC trading often shifted directions following significant options expiry events. Options expiry is often seen as a source of price pressure ahead of the event, as traders try to push the price to a profitable options position. 

Following this week’s expiry, BTC traded at $82,252.43, while ETH sank to $2,717.77. BTC is trading with a sentiment of extreme fear, expecting even lower drawdowns. 

To date in January, BTC is down by 3.35%, in a traditionally slow month during multiple cycles. The asset is now nearly 120 days from its all-time peak, with a 30% drawdown, setting bearish expectations of corrections as low as $40,000.

BTC traders are also noticing BTC is rejecting any attempt to move above $90,000, potentially pointing to deliberate selling. The coin increased its volatility in January, shifting to lower ranges after several liquidation events.