Bitcoin $20K put emerges as the third most popular strike ahead of quarterly expiry.

A surge in deep out-of-the-money bitcoin put options is drawing attention ahead of Deribit’s quarterly expiry, with nearly $600 million in notional value concentrated at the $20,000 strike.

The positioning makes the $20,000 put the third most popular strike, reflecting how traders are accounting for extreme downside risks amid ongoing geopolitical tensions in the Middle East. However, derivatives flows suggest the activity is more tied to volatility strategies than outright bearish bets.

Put options give holders the right to sell bitcoin at a predetermined price. With BTC currently trading below $70,000, the $20,000 strike sits far out of the money, requiring a roughly 70% drop to become profitable.

Data shows about $596 million in notional value clustered at this level, placing it behind the $75,000 strike, which holds $687 million, and the $125,000 strike at $740 million. The distribution highlights a broad range of market expectations, spanning both sharp downside scenarios and bullish upside targets.

While heavy positioning in such a low strike could be interpreted as fear of a market collapse, the reality is more complex. A significant portion of this activity is likely driven by traders selling these far out-of-the-money puts to collect premium, a strategy that benefits from the low probability of bitcoin falling to $20,000.

In that context, the positioning reflects income generation and volatility trading rather than a strong directional view on price.

Overall, approximately $13.5 billion in bitcoin options are set to expire on Deribit. Despite heightened market anxiety, sentiment in the options market remains slightly bullish, with a put-call ratio of 0.63, indicating a higher number of call options than puts.

Total open interest stands at 195,719 BTC, including 120,236 BTC in call options and 75,482 BTC in puts.

Meanwhile, the so-called “max pain” level — the price at which the greatest number of options expire worthless — is positioned at $75,000. This level could act as a gravitational point into expiry, as market makers hedge their positions and potentially guide price action toward it.