Bitcoin Breaks Below Its 200-Week Moving Average as $10 Billion in Options Expire and Strategy Selling Fears Mount

Bitcoin futures tumbled Thursday to as low as $58,995, the lowest price since October 2024, bringing its drawdown from last year's high to about 52%, according to CNBC. The price has been battling the $60,000 level all year — first in February, where it found support, then again in the first two weeks of June, before a pop to over $67,000.

After dipping to that low, bitcoin was trading below its 200-week moving average, a technical level that can signal a prolonged bear market, according to ZeroHedge.

The Options Expiry Hanging Over Friday

About $10 billion in notional Bitcoin options are set to expire on Deribit, the largest crypto options venue, at 4 p.m. Singapore time Friday, according to ZeroHedge citing Bloomberg. That represents roughly 37% of open interest on the platform.

The ratio of puts to calls on those expiring contracts sits at 0.83, meaning the book skews long. Most of those positions were bullish bets placed when prices were higher.

Jean-David Pequignot, chief commercial officer at Deribit, put it plainly: "This is a book that has been positioned for higher prices over the medium term, now being marked against a spot that has slipped. The consensus long-call positioning has drifted offside."

When bullish options expire worthless, the traders who sold them as protection (market makers) no longer need to hold the underlying asset as a hedge. That unwind can push spot prices lower even without new sellers entering the market.

Adam Haeems, head of asset management at Tesseract Group, cautioned that "expiry mechanics clear positioning; they do not set direction," but noted that "thin books plus a concentrated expiry mean Friday's move likely overshoots in whichever direction flow tips first, then mean-reverts once dealer hedging unwinds."

IBIT Put Volume Is Telling a Clear Story

In U.S. equity markets, the iShares Bitcoin Trust ETF (IBIT) saw nearly 1.1 million options contracts trade Thursday, almost double its 30-day average, according to Cboe LiveVol data cited by CNBC.

Put volume more than doubled call volume. According to ThinkOrSwim data, traders bought 275,000 puts versus just under 129,000 calls. Of the $187 million in total premium traded in IBIT on Thursday, $144 million was in puts, per SpotGamma.

Nineteen of the top 20 most-traded contracts by volume were puts. The single most popular contract was the 32.5 strike put expiring Friday, which needs another 4.5% drop in bitcoin to pay off.

Implied volatility in IBIT sits at 53, which options market-makers are interpreting as roughly a 3% expected daily price swing.

Based on July 31 expiry pricing, there is about a 48% probability that IBIT falls below $30.50, meaning bitcoin drops another 10% or more, by month's end. The odds of a 10% rally by that same date are slightly higher, around 55%, according to CNBC's options analysis.

Strategy Is the Contagion Vector

ZeroHedge reported that Strategy (ticker: MSTR) plunged as much as 8% at Thursday's open in what it described as coordinated put activity timed to the 9:30 a.m. ET options restart. No regulatory body has announced an investigation into those claims.

What is documented: Strategy's stock fell hard at the open, its preferred stock tranches dropped alongside it, and bitcoin sold off in near-simultaneous fashion.

Alexander Blume, CEO of Two Prime, an institutional bitcoin asset manager, told CNBC: "Amidst rip-roaring AI stock performance, BTC has struggled in price and in garnering attention. The wobbly behavior of Strategy continues to scare the market, harkening back to other major blow ups the market has seen."

When Strategy's stock falls sharply, the market prices in a scenario where Saylor eventually has to sell bitcoin to service obligations, even though he has stated repeatedly he will not. That fear, whether justified or not, is now moving the spot market on its own.

Options flow in Strategy itself Thursday showed 505,000 puts and 403,000 calls trading, with net positioning skewed toward the downside.

The Case for Patience

US-listed Bitcoin funds posted almost $3 billion of net outflows in June so far, according to ZeroHedge, compounding the pressure from Strategy's stock decline. Griffin Ardern, co-founder of Primal Fund, said option traders' longer-dated bearish bias toward Bitcoin has intensified, while hawkish Federal Reserve commentary and elevated Treasury yields suggest investors are pricing in tighter liquidity. "Under conditions of contracting liquidity, BTC typically does not fare so well," he said.

The July 31 expiry data shows the probability of a 10% rally actually edges out the probability of a 10% decline, 55% to 48%. That's not a ringing endorsement of the bull case, but it's not a one-way street.

What Actually Resolves This

The most concrete near-term event is the Deribit expiry Friday. How market makers unwind hedges on those $10 billion in expiring contracts will determine whether the 200-week moving average break becomes a sustained signal or a brief dip. Haeems noted the more important test will come in the first full week of July, after the quarterly book has cleared and leverage has been reduced.