Key takeaways:

• Bitcoin bulls need a 9% upside from current levels to benefit from Friday’s $10.5 billion option expiration.

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• The 90% correlation between Bitcoin and the Nasdaq 100 index shows that tech investor sentiment influences market confidence.

The price of Bitcoin (BTC) rose to an eight-day high on Wednesday, effectively creating a double bottom near the $62,500 level. Despite these recent gains, Bitcoin’s price remains 21% lower than a month ago, suggesting bulls are unlikely to pull ahead at Friday’s expiration of $10.5 billion worth of monthly BTC options. It is unclear whether the bulls will be able to turn the situation around at the last minute and change the dynamics to their advantage.

Deribit remains the dominant leader with 76% market share, comprising a total of $4.5 billion in call options and $3.4 billion in put facilities. OKX ranks second with $610 million in tender offers and $385 million in put options, representing 10% of the total. CME rounded out the top three with $255 million in tender offers and $287 million in transactions, representing 5% of the market share.

Puts are better positioned despite less open interest

At first glance, the total interest in open put options appears to be 25% lower than for equivalent call options. However, a more detailed picture shows that neutral-to-bullish strategies were caught off guard by Bitcoin’s acute drop below $75,000 in early February. 88% of call options on Deribit will expire worthless if Bitcoin’s price stays below $70,000 on Friday.

Even after excluding calls targeting $105,000 or more, which are typically part of elaborate multi-stage strategies with lower acquisition costs, only 37% of the remaining bets are below $75,000. Realistically, this means that the effective call options open on Deribit are approximately $780 million. Given the current conditions, it is worth analyzing whether bearish investors have overplayed their hand.

Deribit’s $1.44 billion in put options are targeting a Bitcoin price below $60,000, although bets at $40,000 and $45,000 are unlikely to effectively target those specific levels. Calendar and index spread strategies are typically associated with extreme price targets because they do not require a price crash to achieve profitability.

Put options valued at $72,000 and above total $1.15 billion in open interest on Deribit, which is more than enough to offset existing call options. While Bitcoin’s drop to $60,000 was likely unrelated to macroeconomic trends, the importance of Nvidia’s (NVDA US) earnings performance after the U.S. market close on Wednesday should not be underestimated.

The success of the AI ​​sector, in particular the sustainable operating margins of the world’s largest companies, remains decisive for any risk market. History suggests that Bitcoin’s correlation with the stock market rarely lasts long, but the fate of Friday’s $10.5 billion options expiration could be decided by the stock market.

Related: Bitcoin reaches a high of 69.5 thousand dollars after the stock market rebound, good earnings data raise risk appetite

The current 90% correlation between Bitcoin and the Nasdaq 100 index is clear evidence that the tech play is a major driver of investor confidence, but as long as Bitcoin’s price remains below $75,000, the edge will continue to favor puts.

Below are three likely outcomes of Friday’s BTC option expiration on Deribit based on current price trends:

• From $65,000 to $69,000: The net result favors puts (puts) by $1.15 billion.

• From $69,001 to $71,000: The net result favors put(s) instruments by $845 million.

• From $71,001 to $74,000: The net result favors put(s) instruments by $470 million.

Ultimately, Bitcoin bulls need a 9% upside from the current $68,800 level to turn things around at the February option expiration.