Deribit Options: The Hidden Leverage Fueling Bitcoin’s Next Volatility Storm

Deribit's options market isn't just tracking Bitcoin's price—it's building the powder keg for its next explosive move.

The Gamma Trap: How Quiet Markets Set Up Big Swings

Think of market makers as the shock absorbers of crypto. They sell options to traders and then hedge their risk by buying or selling the underlying asset—Bitcoin. When prices hover near key strike levels where lots of options are concentrated, their hedging activity can flip from stabilizing to wildly destabilizing in a heartbeat. It's financial physics: too much gamma exposure turns dampeners into amplifiers.

Volatility, Manufactured Here

This isn't about predicting news. It's about mechanics. A crowded trade around a specific price point forces automated systems into a feedback loop. A dip triggers more selling to re-hedge, potentially deepening the drop. A rally forces buying, potentially accelerating the pump. The market starts moving itself.

Navigating the Synthetic Storm

For traders, it means mapping the invisible. The real action isn't always on the chart—it's in the open interest data. Pinpointing those high-gamma zones gives a clue to where the market's fragile points are. It turns volatility from a mystery into a sometimes-predictable byproduct of its own infrastructure. Just another day where the tail wags the dog—because in crypto, the tail is built out of leverage and algorithms.

Deribit options protect from ETH dip to $2,500

Another $460M in ETH options expired on Friday, with maximum pain at $3,100. Ahead of the weekly event, ETH traded at $2,952.97. 

ETH strike prices are more diverse compared to BTC, with the most liquidity allocated to downside protection at $3,500. 

Based on options positioning, traders may be more bullish on ETH at levels above $3,400. ETH sentiment is also more neutral compared to BTC, which is also reflected in the options market. 

Deribit options prepare for yearly close

In the last quarter of 2025, the options market slowed down. After the Q3 expiry event, Deribit rebuilt a lower level of open interest. 

At the end of Q3, options markets had a total of over $46B in open interest. Toward the end of the year, open interest is down to $39B, remaining flat over the past three months. The last period of 2025 arrived with smaller weekly expiry events, though still retaining the higher baseline achieved at the end of November. 

On December 26, around $23B in options are expected to expire, making up more than half of the open interest. Other contracts will be rolled over into the next quarter. 

After that, the rebuilding liquidity on Deribit may signal the overall trend on crypto markets. Derivative trading lagged behind the October 11 crash, and in fact benefitted as traders were seeking both protection and opportunities to make calls at a favorable price. 

However, the stagnant trading of BTC also led to a slower derivative market, in addition to overall falling interest on futures markets. BTC open interest remains at around $27B, with minimal change since the October crash. 

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