Bitcoin’s derivatives market saw a quiet but meaningful repositioning in July, marked by two liquidation-driven drawdowns in futures and a record expiry event that wiped out over $15 billion in options open interest.
While the reduction in futures and options OI might suggest waning investor interest, a closer look at the data indicates strategic de-risking and rotation into new quarterly positioning rather than outright bearish conviction.
Bitcoin futures open interest started June near $72.5 billion and peaked at $77.7 billion on June 10, right alongside Bitcoin’s monthly high of $110,200. This climb shows a short-lived increase in speculative exposure as traders positioned for further upside after the rally in May.
However, optimism faded quickly, and the market experienced a sharp downside wick on June 15. This pushed Bitcoin below $104,000 in a matter of minutes, triggering a wave of long liquidations. Total futures OI plunged to $69.6 billion (a 10% drop in five days), while spot prices declined around 4%. This marked the first major deleveraging of the month and revealed the fragility of overextended long positions.
A similar pattern followed on June 23 as geopolitical tensions in the Middle East prompted risk-off flows. Bitcoin briefly dropped below $102,000, and futures OI fell again, this time from $72.9 billion to $68.3 billion. The reaction wasn’t as sharp as mid-month, but it showed how sensitive leveraged traders are to macro events. Binance’s share of open interest remained steady between $11.3 billion and $12.3 billion, implying that the largest swings came from offshore venues and CME.
Even as prices recovered toward $107,000 by the end of the month, OI never returned to its early June highs. By July 2, total futures OI stood at $69.5 billion, down roughly 10% from the June peak. This drop in leverage despite price stability indicates we now have a structurally “cleaner” market that’s less prone to forced liquidation cascades.
On June 28, nearly 40% of all outstanding options contracts expired. Deribit alone saw 141,000 BTC in notional exposure roll off its books. Bitcoin’s options OI dropped from $51.1 billion to $35.2 billion in a single day, a 31% reduction. However, despite the scale of the expiry, Bitcoin’s price barely moved, holding steady around $107,300. This decoupling between notional and price reinforces the idea that this was a mechanical adjustment, not a directional event.
It was one of the cleanest quarterly expiries in a while. The low volatility surrounding the event suggested that most positioning had already been adjusted in advance, with limited need for dealers to aggressively hedge into expiry. Post-expiry, options OI rebounded slightly to $35.2 billion by July 2, indicating traders were in the early stages of repositioning for the third quarter.
June’s futures and options cleanup had a visible effect on market structure. Implied volatility remained relatively subdued, even as realized volatility edged lower. This trend, combined with a flattening CME futures basis, down from roughly 9.5% annualized on June 10 to around 6% by June 30, reflects a lower-risk profile in the derivatives market heading into the third quarter.
Much of this repricing appears driven by institutional flows. CME saw large futures rolls throughout the final week of June as traders shifted out of BTCM25 (June expiry) into BTCU25 (September expiry). Meanwhile, on Deribit, call-heavy positioning into late June was replaced by a more balanced skew, with an increase in open interest around $110,000-$120,000 strikes for July and September.
The result of this unwinding and expiry is a market better positioned for directional movement. Bitcoin has entered July with a spot price largely unchanged from mid-June but with far less derivative baggage. Futures OI is down more than $8 billion from the highs, while options OI is $16 billion below the June peak.
The lack of price impact during these drops, especially the massive June 28 options expiry, suggests that traders remain engaged but more disciplined. A lighter, more responsive market opens the door for sharper moves if we see other major catalysts in the third quarter. Whether that results in a breakout above the ATH or a return to volatility compression will depend on external triggers. But after a volatile June, the deck has been cleared for the next leg of the derivatives cycle.
