Bitcoin (BTC) continues to capture the attention of traders and investors as it pushes toward key psychological and technical resistance levels. On May 8, BTC surged past $101,000, marking its highest price in over three months with a 4.6% single-day gain. This rally triggered the liquidation of $205 million in bearish futures positions and dramatically reduced the value of most out-of-the-money put options. Market participants are now asking: Could Bitcoin break through its all-time high of $109,354 in the near term?
Emerging data from derivatives markets suggests that structural shifts in options positioning may be setting the stage for a powerful upward move — especially if key price thresholds are breached.
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The Power of Expiring Put Options
One of the most compelling factors supporting a bullish outlook is the concentration of Bitcoin put options set to expire worthless if prices remain elevated.
According to Laevitas.ch, the total notional value of Bitcoin put options expiring within the next three months stands at $8.3 billion**. However, an overwhelming **97% of these puts have strike prices below $101,000 — meaning they will expire with zero value if Bitcoin sustains its current momentum.
This creates a self-reinforcing dynamic: as BTC holds above $100,000, more bearish bets lose value, weakening downward pressure and reducing incentives for further shorting. While some traders who sold these puts may profit from their decay, the broader market effect is a net reduction in downside risk.
It’s important to note that not all put option holders are betting on a crash. Many sophisticated traders use short put strategies to generate income in neutral or bullish markets. But when large volumes of puts expire worthless, it signals fading fear and growing confidence in higher prices.
Bullish Option Strategies Gain Momentum
On Deribit — the dominant crypto options exchange — certain strategies are seeing increased adoption, revealing traders' growing optimism.
The bull put spread is among the most popular setups. This strategy involves selling a put option at a higher strike price while simultaneously buying another put at a lower strike. For example, a trader might sell a $100,000 put and buy a $95,000 put. The result? Limited profit potential, but also capped risk — ideal for moderately bullish market conditions.
Another widely used approach is the bull call spread, where traders buy a call at a lower strike and sell one at a higher strike. Similarly, the bull diagonal spread combines long-term calls with short-term short calls to capitalize on time decay and directional movement.
These strategies reflect a consensus: many professional traders expect Bitcoin to trade at or above current levels by expiration dates in May and June. Such coordinated positioning can create upward momentum as traders actively defend favorable price zones.
How Call Options Fuel Price Breakouts
While puts are fading, call options — which give holders the right to buy BTC at a set price — are becoming increasingly influential.
If Bitcoin stabilizes above $100,000, most call buyers and spread traders will see positive returns upon expiration. This incentivizes active support of the price level through buying pressure or market-making activity. In derivatives markets, this phenomenon is known as gamma exposure, where dealers hedge their short gamma positions by buying BTC as prices rise — further amplifying gains.
Moreover, if BTC climbs beyond $105,000, it could trigger a wave of short covering in the futures market.
Understanding Short Covering and Its Impact
Bitcoin futures currently show a total open interest of $69 billion, indicating substantial selling pressure from short sellers. Normally, when prices rise sharply, these traders face margin calls and are forced to close their positions — buying back BTC to limit losses. This process, known as short covering, adds additional upward momentum.
However, not all shorts contribute equally to price swings. Many institutional traders employ delta-neutral hedging strategies, such as pairing spot ETF holdings with short futures positions. These "arbitrage trades" aim to profit from funding rates or basis spreads rather than directional moves, making them less likely to panic-sell or rush to cover.
That said, the current environment limits such arbitrage opportunities.
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Limited Arbitrage Incentives Boost Volatility Potential
For arbitrageurs to remain active, there must be sufficient incentive — typically in the form of futures premium, or “contango.” When monthly futures trade at a significant premium to spot prices, traders can profit by holding spot BTC while shorting futures.
But over the past three months, the annualized premium on two-month Bitcoin futures has remained below 8%, according to Laevitas.ch. This relatively low carry return reduces the attractiveness of delta-neutral strategies, meaning fewer traders are insulated from price movements.
As a result, more market participants are exposed to pure directional risk. If Bitcoin pushes past $105,000, we’re likely to see stronger-than-usual short covering dynamics, especially from retail and leveraged traders without hedges.
This confluence — weakening bearish options, rising call demand, and unhedged shorts — increases the probability of a breakout toward new all-time highs.
Frequently Asked Questions (FAQ)
Why do expiring put options support higher Bitcoin prices?
When put options expire worthless, bearish bets vanish without triggering offsetting selling. This reduces downward pressure and signals declining fear in the market.
What is a bull put spread?
A bull put spread involves selling a put option at a higher strike and buying another at a lower strike. It generates income if BTC stays above the higher strike, with limited risk if prices fall sharply.
How does short covering affect Bitcoin’s price?
Short covering occurs when traders close losing short positions by buying back BTC. This buying activity adds upward momentum, especially during strong rallies.
Can futures open interest predict price direction?
Not directly. High open interest shows market engagement but doesn't indicate direction. However, sudden liquidations during price spikes often precede further gains due to forced buying.
What role do call options play in price discovery?
Call options reflect bullish sentiment. As more traders buy calls or implement bullish spreads, dealers hedge by purchasing underlying BTC — creating structural buying pressure.
Is a $109,354 Bitcoin breakout likely?
With fading puts, concentrated bullish options strategies, and potential short covering above $105,000, conditions are increasingly favorable for surpassing the previous high.
👉 See how strategic derivatives positioning might propel Bitcoin past $110K.
Conclusion
Bitcoin’s recent climb above $101,000 has done more than just excite investors — it has fundamentally altered the structure of the derivatives market. With nearly $8.3 billion in put options at risk of expiring worthless and bullish spread strategies dominating trading activity, momentum is shifting decisively upward.
Meanwhile, limited arbitrage incentives mean fewer traders are hedged against price moves, increasing the likelihood that any push above $105,000 could trigger widespread short covering. Combined with positive gamma effects from call options, this creates a powerful feedback loop capable of driving BTC to new all-time highs.
While nothing is guaranteed in volatile markets, the current alignment of options flows, futures positioning, and trader sentiment suggests that the path of least resistance is higher — and Bitcoin may be just one catalyst away from breaking past $110,000.
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