BTC and ETH Options Market Enter Critical Phase as Monthly Expiry Approaches

Q1 2026 begins with a pivotal moment for the Bitcoin and Ethereum derivatives markets. A massive wave of options expirations is on the horizon, creating a significant turning point for market sentiment and trader strategies across the ecosystem.

Major Options Data Approaching Expiration

According to data from BlockBeats, this monthly expiration period involves an astonishing number of positions. Approximately 91,000 BTC options contracts are set to expire soon, with a notional value of $7.6 billion. The Put-to-Call ratio for BTC stands at 0.48, while the MAX Pain Point is recorded at $90,000. Meanwhile, the ETH options market shows a volume equal to 435,000 contracts expiring soon, with a notional value of $1.19 billion. The Put-to-Call ratio for ETH is higher at 0.68, with a MAX Pain Point of $3,000.

Analyst Adam from Greeks.live notes that this moment marks the first month’s expiration following the previous year’s settlement, with these options accounting for a quarter of the total scheduled expirations, involving nearly $9 billion in market exposure. A unique characteristic of this expiration is the dominance of bullish options, reflecting positive expectations from some traders despite ongoing turbulence.

Volatility Spikes Amid Market Pressure

BTC and ETH prices have fallen sharply since the previous period, with panic re-emerging among market participants. The market has experienced sustained pressure from the downturn in Q4 of last year, but certain levels remain as strong support—$80,000 for Bitcoin and $2,500 for Ethereum serve as significant anchor points.

Data from options instruments show a noticeable increase in implied volatility (IV). The long-term IV for BTC averages around 45%, while for ETH it’s at 60%, both reaching their highest levels this year. This high volatility reflects intense market uncertainty and traders’ need to hedge their positions.

Trader Strategies: Holding Cash and Bearish Defense

This period is characterized by high trading volume and a proportion of active transactions, mainly driven by the need to readjust positions. Market makers and active traders are currently holding substantial cash reserves, indicating their readiness to execute aggressive trades. The largest demand is concentrated on bearish hedging strategies, suggesting that although bullish options dominate the expiration structure, real-time activity is more focused on downside risk hedging.

With BTC now at $70.45K and ETH at $2.07K based on recent data, the momentum of the options market will be a key catalyst in determining the next price movement. How these options expirations will influence price dynamics depends on how traders close and balance their positions ahead of expiration.