Bitcoin traders spent much of July pointing to a clear reason for the market’s lack of direction. A heavy concentration of options contracts, they argued, was keeping Bitcoin boxed in because dealers who had sold those contracts were buying dips and selling rallies to keep their hedges balanced. Once those contracts expired, the market would no longer be pinned and Bitcoin would be free to move.

That explanation has now been tested across two consecutive Friday expiries, and Bitcoin remains close to where it began. The asset traded just below $64,000 on Saturday after ending a week in which it failed to hold $66,000 and then slipped back through the level that positioning was expected to support. With those expiries out of the way, the remaining evidence points to weak demand for Bitcoin on both sides of the market.

Weekly options expiries did not drive a breakout

Roughly 19,000 Bitcoin options with a notional value of about $1.2 billion expired at 08:00 UTC on Friday on Deribit, the exchange that handles most crypto options trading. Deribit set the max-pain level for that expiry at $64,500. Bitcoin closed the day at $64,140, about $360 below that level, after opening at $65,099 and touching $63,740 during the session.

One week earlier, an expiry of the same size had a max-pain level of $63,000, after which Bitcoin moved toward $65,400 in the following days. The two expiries produced different price paths, and in neither case was there clear evidence that the max-pain level exerted a visible pull on the market.

Max pain is often cited as if it were a market force, but it is only a calculation. An option gives its holder the right to buy or sell Bitcoin at a set price on a specific date. Max pain is the price at which option sellers would owe the least money when those contracts settle. It reflects where open bets have accumulated, based on contracts that remain outstanding, but it does not itself create a mechanism that pushes Bitcoin toward that price.

That distinction matters because options can shape short-term trading only through the behavior of participants hedging or closing positions. Without sustained spot demand or forced derivatives flows, an expiry level by itself is not enough to explain why Bitcoin trades in a range.

The same caution applies to the $1.2 billion figure. That amount represents the face value of the Bitcoin referenced by the contracts, while the actual capital at risk is only a small portion of the notional total. It is also not possible to say with certainty how dealers were required to hedge before settlement, because exchange data shows the number of contracts at each strike but not which participants hold each side of the trade.

Strong claims about dealer positioning therefore depend heavily on assumptions. As the crypto options market has grown, getting those assumptions wrong has become increasingly costly. Ethereum added another $234 million to Friday’s settlement, with a max-pain level of $1,875 and a put-call ratio of 1.29, reflecting a month of appetite for downside protection.

What did happen on Friday was clearer in the trading data. CryptoQuant’s exchange-wide figures monitor which side of the market crosses the spread to get filled, offering a proxy for which participants are acting with urgency.

On both Thursday and Friday, sellers were the side acting more urgently. The Coinbase premium index, which compares Bitcoin’s price on the largest U.S. exchange with prices on offshore venues, fell to a 0.088% discount on Friday. That was its widest discount since July 16 and indicated that U.S. buyers had stepped back.

Leveraged long traders were liquidated for $45.9 million on Friday, compared with $7.4 million in short liquidations, a roughly six-to-one imbalance.

Overall leverage remained muted. Funding rates, which are payments leveraged longs make to shorts to keep positions open, averaged 0.0038% across exchanges on Friday. That was down from 0.0064% five days earlier and only slightly above neutral. Open interest across futures and perpetual contracts ended at $22.35 billion, up from $21.26 billion when the previous expiry settled. It also edged higher on Friday even as Bitcoin’s price fell 1.5%, showing that new positions were being added during the decline.

U.S. spot Bitcoin ETFs recorded $225.2 million in outflows on Thursday, ending a seven-session inflow streak that had attracted close to $1 billion. BlackRock’s IBIT accounted for $202.5 million of the reversal. Despite the outflow, the week still ended with around $274 million in net positive flows.

ETF flows are watched closely because spot products create direct primary-market buying or selling pressure when shares are created or redeemed. In a week when leverage was not extreme, that made the reversal in U.S. ETF demand another useful check on whether the range was being driven by derivatives positioning or by weaker cash-market participation.

Renewed tension between the United States and Iran weighed on equities heading into the weekend and pulled crypto markets lower as well. The Crypto Fear and Greed Index fell three points to 28, while implied volatility moved down toward 35%.

A large July options bet remains 9% away

Deribit’s board shows nearly $5 billion of open interest at the $70,000 and $72,000 strikes for the July 31 monthly expiry. That represents about 18% of the exchange’s entire $28 billion Bitcoin options book. Calls dominate both strikes. As of July 20, about 27,000 contracts were positioned at $70,000 and roughly 21,000 were positioned at $72,000.

A single structure represents a large share of that positioning. Deribit chief commercial officer Jean-David Péquignot described one block trade that bought 20,000 of the $70,000 calls and sold 20,000 of the $72,000 calls. The two-legged trade was worth about $2.5 billion in gross notional value.

The structure pays out if Bitcoin finishes above $70,000, but stops gaining once the price moves beyond $72,000. It also costs less upfront than buying the lower strike alone, because selling the higher strike offsets part of the premium. The trade reflects a targeted move within a specific time window, paid for through that options structure.

That makes the July 31 expiry a cleaner test than the smaller weekly settlements. The open interest is larger, it is concentrated at two nearby call strikes, and the trade has a defined upper boundary, so the settlement will show whether that specific upside demand was early, hedged, reduced or left out of the money.

That window appears to have been selected for a reason. Jimmy Yang of Orbit Markets, an institutional liquidity provider, linked the July 31 call demand to expectations that the CLARITY Act would pass, with traders reducing exposure since then.

Polymarket now prices the likelihood of passage in 2026 at roughly 35%, down from above 80% in February. The decline followed a merged Banking-Agriculture draft that removed the ethics provision Democrats had demanded and prompted formal opposition from Senators Chris Murphy, Chris Van Hollen and Jeff Merkley. The August recess leaves the Senate with a narrow window to act.

The expiry also comes two days after the Federal Reserve’s policy decision. The FOMC meets on July 28 and 29, with its statement scheduled for 2:00 p.m. ET on Wednesday and Kevin Warsh’s press conference set for half an hour later.

No set of economic projections is attached to this meeting, making the wording of the statement the main policy signal. Rates have remained at 3.50% to 3.75% for four consecutive meetings. Futures markets assign roughly a one-in-three probability to a quarter-point increase, while a rate cut is priced at effectively zero.

Governor Lisa Cook has cited inflation running at 3.7%. Vice Chair Philip Jefferson and Governor Christopher Waller have both warned that policy may need to be revisited if prices remain elevated.

For the $70,000 strike to finish in the money, Bitcoin must rise about 9% in six days. Deribit’s own probabilities put the chance of Bitcoin merely touching $70,000 during July at 14.5%, while the probability of touching $72,000 is 4.1%.

Gamma exposure, which measures how aggressively dealers must adjust hedges as prices move, is concentrated at $65,000 and $72,000. The nearer cluster is directly around the market price but is relatively small. The larger cluster is far enough away that it has little influence unless Bitcoin first closes most of the gap on its own.

As a result, the largest concentration of conviction in Bitcoin options is sitting at a price the market assigns less than a one-in-six chance of even reaching. It also expires 48 hours after a central bank meeting whose outcome traders cannot call with confidence.

The two weekly expiries that attracted attention this month have now settled without changing Bitcoin’s range. For now, that range is being determined by spot-market participation, and over the past week, few buyers or sellers have provided enough demand to break it. The remaining July expiry will test a much larger options cluster, but the same constraint still applies: without stronger underlying flow, positioning alone has not been enough to move Bitcoin out of its range.