Bitcoin fell to its lowest level in over two weeks as traders adopted a more cautious stance after the year’s biggest options expiration, Bloomberg reported. At the moment of writing, BTC trades for the highs $66k.
Bitcoin Options Market Turns Defensive
The drop followed the largest Bitcoin options expiry of 2026 so far, with roughly $14 billion in notional contracts rolling off on Friday. Around 30–40% of open interest in front‑month Bitcoin options was wiped out in a single session, leaving a “cleaner” positioning landscape. Spot volumes picked up versus the previous session (e.g. +10–20%), suggesting the move was driven by more than just options mechanics.
Positioning shows traders are bracing for a drawn‑out conflict, Griffin Ardern, co‑founder of multi‑asset manager Primal Fund, said. The risk of stagflation, and even “forced rate hikes” has sharply deepened bearish sentiment.
Post‑expiry, more people were buying protection than betting on upside. Options flows skewed toward puts, with put volumes outpacing calls: over the past 24 hours, the put/call ratio has climbed to 1.3, signaling that traders are loading up on downside protection as they head into the weekend.
Derivatives Positions Hold The Key
According to Fortune, market participants view derivatives positioning going a long way toward explaining the recent still. James Harris, CEO of asset manager Tesseract, believes institutional players spent much of the first quarter selling upside calls, essentially betting that prices wouldn’t rip higher, to harvest premium in a quiet market. That flow pushed risk onto market makers, who in turn have been buying dips and fading rallies to keep their books roughly hedged.
Traders say this setup has effectively smoothed out volatility, with Bitcoin’s price repeatedly drifting back toward the so‑called “max pain” zone around $75,000, where the most options expire worthless. In practice, those hedging flows have worked like a magnet, pulling BTC higher on dips but also putting a lid on how far rallies can run.
What Traders Should Look For Next
The shift in positioning comes after a powerful Q1 run, with Bitcoin still up double‑digit % year‑to‑date even after the latest pullback.
If defensive positioning in options persists (elevated put/call, negative skew, higher near‑term IV), it may signal traders are bracing for another leg lower rather than a quick “buy‑the‑dip” rebound.
For active traders, the setup favors disciplined risk management: tighter stops on leveraged longs, selective hedging via short‑dated puts, and watching whether defensiveness eases or intensifies into the next major macro/data catalyst.
Cover image from Perplexity, BTCUSD chart from Tradingview
