Will Markets React to $2.8B Crypto Options Expiry Event?

Key Insights:

• About $2.8B in BTC and ETH options will expire on January 16 2026, with Bitcoin dominating total notional value.

• Price action stayed tight into expiry as hedging flows capped volatility.

• ETH shows breakout potential, while BTC pushes toward a $100K decision point.

On Friday, Jan. 16, a significant options expiry event will conclude with around 25,000 Bitcoin contracts and 131,000 Ethereum contracts settling simultaneously, creating a combined notional value of about $2.83 billion. Roughly, $2.4 billion of this total in Bitcoin options, and $430 million in Ethereum options reaching settlement. 

Options expiries serve as focal points because they often concentrate market sentiment and hedging flows near specific price levels. This can artificially damp down volatility and clustering price action around each so-called “max pain” levels; strike prices at which the majority of contracts expire, having expired worthlessly to their holders.

Why Volatility Stayed Muted

Ahead of the event, there was a subdued volatility and range bound prices in the markets despite an increase in the total market capitalization. Bitcoin flirted near key resistance, rising toward $97,000 on Thursday before pulling back, while Ethereum also rose then eased near $3,400. 

This is explained by hedging mechanics. As the expiry date nears, the dealers respond by either selling or buying spot and future. These flows are also capable of cancelling, which compresses the volatility.

Prices move laterally, rather than in a sharp manner. This dynamic has the effect of concealing pressure instead of eliminating it.

Ethereum: Structure Favors the Bulls

The structure of Ethereum appears positive following the expiry. Recent price action indicates that ETH reclaimed and has been in key resistance at around $3,300, with buyers intervening each time it falls.

Bulls have begun to push against areas of resistance at the $3,500 area, which is an indication of an emerging breakout framework.

ETH bulls are back in short-term control, defending higher lows and building momentum. Assuming price does not fall below reclaimed support, ETH may look to make a continuation of the price to the $3500-$4,000 area. The expiry of the options can come to the rescue with the derivative-related friction that had earlier pegged the price.

Still, resistance matters. Inability to move higher may lock ETH in the consolidation. The following several sessions would show whether the demand will be high when the hedging pressure is completely eliminated.

Bitcoin and the $100K Question

A more psychological test awaits Bitcoin.  Below $100,000, price compression has continued, making that level a distinct decision zone. According to analysts, Bitcoin is at a crossroads where momentum buying could be triggered by a clean break higher and a deeper pullback could be invited by rejection.

A layer of derivative noise is eliminated by the expiry. Bitcoin's next move might more accurately reflect actual demand if fewer contracts have an impact on dealer behavior.

A surge above $100,000 would indicate power and assurance. After the recent rally, a failure might indicate fatigue.

What Deribit Data Tells Traders

Deribit’s X commentary about expiries highlights put-call ratios and max pain levels. These measurements aid in the explanation of why prices stagnate before settling. While expiry day itself rarely delivers instant trends, the aftermath often does.

Liquidity conditions shift after hedges unwind. After that, traders see an increase in volatility and a rebuilding of open interest. Clearer direction frequently appears at this point.

So, Will Markets React?

Seldom does the response occur on schedule. This expiration functions less as a trigger and more as a reset. If bulls continue, Ethereum seems to be in a better position for growth. The reaction of Bitcoin near $100,000 will influence broader sentiment.

The expiry will not be the end of the story but a reset. Prices will face clearer tests of support and resistance that could define the next meaningful moves in both ETH and BTC markets.