Nearly $2.5 billion in Bitcoin and Ethereum options expire today, setting up a potentially volatile end to the month as traders juggle upside bets with deep downside insurance.

On the surface, positioning appears constructive. But beneath the call-heavy skew lies a striking anomaly: one of the largest open interest clusters in Bitcoin sits far below spot — at the $40,000 strike.

Bitcoin is currently trading around $67,271, with max pain positioned at $70,000. Open interest shows 19,412 call contracts and 11,044 put contracts. This gives a put-to-call ratio of 0.57 and reflects an overall upside bias. The total notional volume tied to the expiry is roughly $2.05 billion.

Ethereum mirrors that constructive tilt, though in a more balanced fashion. ETH trades near $1,948, with max pain at $2,025.

Calls (124,109 contracts) outnumber puts (90,017), resulting in a put-to-call ratio of 0.73 and a notional value of approximately $417 million.

“…positioning skews call heavy across both assets, with BTC showing the stronger upside skew. Max pain levels sit below dominant call open interest in BTC, while ETH positioning is more balanced but still constructive,” analysts at Deribit noted.

Max pain refers to the price at which the greatest number of options expire worthless, minimizing payouts to buyers.

With both BTC and ETH trading below their respective max pain levels, price gravitation toward those strikes into expiry could reduce losses for option sellers.

Despite the headline bullish skew, a massive concentration of puts at the $40,000 strike has caught market attention.

The $40,000 Bitcoin put is now the second-largest strike by open interest, representing roughly $490 million in notional value. This comes after Bitcoin’s sharp retracement from prior highs, which reshaped hedging demand across the board.

“While aggregate positioning into expiry skews call heavy, one strike stands out: The $40K BTC put remains among the largest open interest strikes ahead of February expiry. Deep OTM downside protection demand remains visible on the board, even as headline put/call ratios lean constructive,” Deribit analysts indicated, highlighting the unusual size of the position.

In short, traders may be positioned for upside, but they are unwilling to rule out another volatility shock.

The dynamic suggests a broader change in Bitcoin’s derivatives market. Options are increasingly used for directional bets, yield strategies, and volatility management.

Analyst Jeff Liang argued that extracting premium from the options market could reduce structural selling pressure.

“If we can stably extract the premium from the options market and empower Bitcoin HODLers, it means: HODLers no longer need to sell their Bitcoin to improve their lives… Selling pressure on Bitcoin will reduce… This will further drive Bitcoin’s price upward,” he stated.

The analyst described options premium as a “localized pump” driven by fear and greed, one that redistributes value to long-term holders without contradicting Bitcoin’s fixed supply cap.

Overall, calls outweigh puts across both BTC and ETH, signaling that traders retain exposure to a rebound. Yet the sheer scale of deep out-of-the-money hedges reveals a market that remains cautious.

With billions in notional value set to expire, the key question is whether prices drift toward max pain—or whether hidden crash-protection demand proves prescient, reigniting volatility just as traders expect calm.

Read original story $2.5 Billion Crypto Options Expiry Looms — But It’s the Massive $40,000 Bitcoin Bet That Has Traders on Edge by Lockridge Okoth at beincrypto.com