The cryptocurrency market faces a pivotal moment today as nearly $3 billion worth of Bitcoin and Ethereum options contracts reach expiration on Deribit, the world's largest crypto options exchange. With Bitcoin hovering near $95,700 and Ethereum holding around $3,315, the options expiry could provide the catalyst for the next major directional move.

Breaking Down the Numbers

According to data from Deribit, the total notional value of options expiring on January 16, 2026, stands at approximately $2.84 billion. Bitcoin dominates the expiry, accounting for roughly $2.4 billion, while Ethereum contributes around $437 million.

The scale of today's expiration ranks among the larger weekly events of the past month, though it pales in comparison to the quarterly "quad witching" events that can see $10 billion or more in contracts settle simultaneously.

"Options expiries of this magnitude often create short-term volatility as market makers adjust their hedging positions," explained Luuk Strijers, chief commercial officer at Deribit. "The key levels to watch are the max pain prices, where the largest number of contracts expire worthless."— Luuk Strijers, Deribit

The Max Pain Phenomenon

For Bitcoin, the "max pain" level—the price at which the most options contracts would expire worthless, causing maximum loss for option buyers and maximum gain for option sellers—sits at $92,000. With Bitcoin currently trading at $95,700, this creates an interesting dynamic.

Historically, crypto prices have shown a tendency to gravitate toward max pain levels in the 24-48 hours before major expiries, a phenomenon some traders attribute to market makers defending their positions. However, this week's expiry sees Bitcoin trading notably above its max pain level, suggesting either strong underlying demand or that the gravitational pull may not materialize.

Ethereum's max pain sits lower relative to its spot price, creating similar dynamics for ETH traders.

Put/Call Ratios Tell a Story

The options market's sentiment can often be gleaned from put/call ratios—the relationship between bearish put options and bullish call options. For Bitcoin's January 16 expiry, the put/call ratio sits at 0.67, indicating roughly 1.5 calls for every put option.

This moderately bullish positioning reflects the crypto market's general optimism following Bitcoin's strong start to 2026. After dipping below $90,000 in early January, Bitcoin has recovered sharply, and options traders appear positioned for further upside.

Market Context: A Challenging Week

Today's options expiry arrives after a challenging week for crypto markets. Bitcoin fell 0.8% in the past 24 hours to $95,702, while Ethereum dipped 0.3% to $3,315. Nine of the top ten cryptocurrencies by market cap have seen losses over the past day.

The selling pressure comes amid broader risk-off sentiment as traders digest:

  • Elevated geopolitical tensions affecting risk appetite globally
  • Questions about the Federal Reserve's independence following the DOJ probe of Chair Powell
  • A three-day weekend in U.S. markets for Martin Luther King Jr. Day
  • Continued outflows from Bitcoin ETFs, which saw $4.57 billion exit over November and December

What Happens After Expiry

Options expiries often create short-term noise that quickly dissipates once contracts settle. The more interesting question for crypto traders is what the options market says about medium-term expectations.

Looking at the options chain for February and March expiries, traders continue to favor calls over puts, with substantial open interest at Bitcoin strike prices of $100,000, $110,000, and even $120,000 for March contracts. This suggests the derivatives market remains broadly optimistic about crypto's trajectory despite recent volatility.

"The options market isn't predicting an imminent collapse," noted Will Clemente, co-founder of Reflexivity Research. "What we're seeing is normal position adjustment ahead of a long weekend. The structural bid for crypto remains intact."— Will Clemente, Reflexivity Research

Trading Strategies for Expiry Day

For active traders, options expiry days present both opportunities and risks:

  • Volatility spike potential: The hours around 8:00 AM UTC (when Deribit options settle) often see increased volatility
  • Liquidity considerations: Market makers may widen spreads as they close positions
  • Post-expiry direction: The removal of options-related positioning can sometimes lead to cleaner directional moves
  • Weekend gap risk: With U.S. markets closed Monday, crypto could face thinner liquidity

For long-term investors, today's options expiry is largely noise. The fundamental case for Bitcoin and Ethereum—institutional adoption, improving regulatory clarity under the new SEC approach, and continued development of blockchain infrastructure—remains unchanged regardless of where contracts settle.