Bitcoin’s struggle to find direction near $90,000 has been attributed to “positioning in the options market.”

On Jan. 29, blockchain outlet Cointelegraph cited a report from Coinbase-owned derivatives exchange Deribit, saying a rise in short-term options volumes and open interest (OI) concentrated at certain strike prices is keeping the price range-bound.

According to the report, Deribit analysed that “Bitcoin’s moves become clearer when viewed through positioning rather than just price.” It said that ahead of a large options expiry on Jan. 30, open interest has been concentrated at strike prices near current levels, causing buying and selling flows to interlock and limiting volatility.

Bitcoin has in fact been moving within a range since mid-November last year, finding support near $85,000 and resistance near $95,000. Deribit said “a significant portion of market exposure is structured through options rather than leveraged futures,” and pointed to increased trading in short-dated options, especially put options, as a sign traders are managing risk through hedging rather than aggressive bets. In that case, it said, hedge adjustment flows could have a more sensitive impact on price than external policy.

Deribit explained that “in rising phases, risk-reducing selling tends to emerge, and in falling phases, buying may flow in to adjust exposure, meaning additional momentum is needed before a trend breaks out of the range.”

Data from on-chain analytics firm Coinglass also supports this. Bitcoin options open interest is currently about $38.7 billion and has been steadily rising this month. Deribit estimated the notional value of contracts expiring on Jan. 30 at about $8.4 billion. The put-to-call ratio is 0.54, meaning there are more call options than put options, and the “max pain” level, meaning the price at which call and put buyers suffer the largest losses at expiry, was given as $90,000. Open interest is most concentrated at the $100,000 strike price.

The market is placing weight on the likelihood that the range-bound market could persist in the short term, as a position rebalancing process may continue even after the options expiry. Deribit said hedging demand can shake prices in areas where short-dated options trading is active, and it judged that whether volatility expands will depend on where open interest is repositioned after expiry.

Bitcoin trading near 90K right now looks a lot clearer when you view it through positioning rather than just price. Futures OI is steady, so participation hasn’t dropped off and this isn’t a broad deleveraging phase. At the same time, options OI into the Jan 30 expiry is… pic.twitter.com/HBnZHt6I5V