In a guest column for ForkLog, trader and Coen+ Telegram channel author Vladimir Coen analyzed the positioning in the bitcoin options market ahead of the August 28 expiration. He suggests that the mechanical demand that recently pushed the leading cryptocurrency towards $80,000 has been exhausted, and the $82,000 level could serve as the next price ceiling.
Bitcoin is trading around $79,450. Over the past week, the leading cryptocurrency has gained 23%, but it is still down 9.2% since the beginning of the year. We are witnessing a strong rebound within a larger decline, but a trend reversal has yet to be confirmed.
There are approximately $18.6 billion in open interest across three major expirations in the coming month:
- August 28 — 81,666 contracts worth $6.43 billion;
- September 4 — weekly expiration worth $1.55 billion;
- September 25 — quarterly expiration, 134,970 contracts worth $10.62 billion.
The max pain level for the August 28 and September 4 expirations is at $68,000, while for the quarterly expiration, it is at $70,000.
This structure was formed while bitcoin traded in the $62,000–$66,000 range for about a month and a half. The price then moved more than 15% away from this range in just three sessions. Positioning did not have time to adjust, turning max pain into a relic rather than a guide.
When bitcoin was around $64,000, market makers sold calls at strikes between $67,000 and $75,000. Upon exercising such rights, the seller must fulfill them, and as the price rises, they are forced to buy more of the cryptocurrency.
This mechanical buying was one of the main drivers of the surge from August 19 to 21, with the market moving from approximately $64,000 to $78,000 over three sessions, with volumes three times the August average.
Now, the main work is done: 68% of calls are deep in the money, so the necessary hedge volume has been accumulated. The engine that drove the price up has stopped. This is why the market has been unable to hold above $80,000 for four consecutive sessions.
Insurance Below $70,000 Has Expired
Formally, the put-to-call ratio for the August expiration appears balanced at 0.83. However, 83% of all puts are at strikes below $70,000, which is 12% less than the current price three days before expiration. This insurance has already expired.
For the September 4 expiration, the $82,000 strike has the highest volume — about $185 million, or roughly 12% of the entire weekly expiration.
The relationship with the $80,000 strike suggests this is likely not a simple bet on growth but a related options structure. Its maximum profit is achieved at $82,000, and above $84,000, the position incurs losses. Therefore, $82,000 will act as a ceiling until the market surpasses $84,000.
Above this level, the logic reverses, and the same structure begins to push the price upward.
Scenarios Until August 28 Expiration
- Base scenario — 55%. Bitcoin remains in the $78,000–$81,800 range.
- Breakout upward — 25%. A move above $81,300 with a push into the $81,800–$84,500 zone through short squeezes.
- Break below $78,000 — 20%. A cascade of long liquidations with a move towards $75,000–$77,000.
After expiration, the picture changes significantly.
Call sellers who held bitcoin under sold rights are freed from hedging and begin to sell it off. This deferred supply, amounting to over $1 billion, could put pressure on the market.
To be continued.
