A $5 billion cluster has formed in bitcoin options. It tells a bullish story

Bitcoin’s BTC$64,989.11 options market on the leading exchange, Deribit, is heavily concentrated around two specific price levels, and the positioning tells a clear bullish story.

The $70,000 and $72,000 options have together accumulated a notional open interest of nearly $5 billion, representing roughly 18% of the platform’s total BTC options open interest of $28 billion. This makes them the two most popular contracts on the exchange, with one contract representing one BTC.

The scale of positioning at these two levels is striking. According to data from Laevitas, the $70,000 strike currently has approximately 39,000 contracts active versus 3,800 puts, while the $72,000 level carries roughly 37,900 calls to only 1,200 puts. The heavily skewed call-to-put ratio reflects the bullish sentiment.

Call options give the buyer the right to purchase bitcoin at a specific price, in this case $70,000 or $72,000, by a set date. They are essentially bullish bets, expressing a view that price will rise above that level. Put options work the opposite way, giving the buyer the right to sell at a specific price, and are generally used to bet on or hedge against price declines.

Several large, deliberate trades hit the tape recently, building up this concentration of open interest at $70,000 and $72,000 levels. Laevitas identified a large bull call spread structure, involving buying the $70,000 call and simultaneously selling the $72,000 call.

The bull call spread, as the name suggests, bets on a moderate upswing in prices of the underlying asset, in this case, up to $72,000.

“The structure accounts for approximately 49% and 50% of total call open interest at the $70K and $72K strikes, respectively,” Laevitas noted.

Other notable trades included calendar spreads, a strategy used to profit from volatility changes in short- and near-term expiries.

Another trader or a group of traders bought a large number of calls at $70,000, paying $3.4 million in premium to gain upside exposure.

Jimmy Yang, co-founder of Orbit Markets, an institutional digital asset liquidity provider, pointed out similar trades, saying these have been driven by Clarity Act optimism.

“Earlier this month, we saw decent demand for BTC topside calls, with the 31 July $70,000 and $72,000 strikes being particularly popular. A lot of this positioning was driven by expectations that the CLARITY Act could be passed before the end of the month,” Yang said.

However, he added that, in the last 24 hours, the market has dialed back those expectations, leading to unwinding of some of these bullish bets.

The odds of the Clarity Act being signed into law this year have dropped to 38% from 51% early this week, according to Polymarket. This decline follows comments by Senate Majority Leader John Thune that he does not expect the Senate to pass the bill before the body adjourns for its August recess.