Bitcoin Bears Face $8.65B ‘Gamma Trap’ as March Expiry Targets $90,000

The $8.65 Billion Elephant in the Room

Bitcoin is trading near $71,200 today, recovering from a brutal flush that dragged prices toward $60,000 earlier this week. While retail sentiment remains fearful, the derivatives market is quietly constructing a massive liquidity trap for late bears. The March 27 quarterly options expiry now holds roughly $8.65 billion in open interest, with a max pain point sitting aggressively higher at $90,000.

This $20,000 spread between spot price and the max pain level creates a high-stakes mechanical conflict. Option dealers, who are generally short gamma on the upside, must hedge their exposure by buying spot Bitcoin as prices rise. If the market begins to grind toward $80,000, these hedging flows could act as rocket fuel, forcing a feedback loop that punishes shorts who are betting on a prolonged bear market.

The Mechanics of the Squeeze

Data from Deribit reveals a distinct skew in positioning. For the March 27 expiry, call options outnumber puts (approx. 69,800 calls vs. 53,200 puts). This structure implies that while the broader market panicked during the drop to $63,000, smart money largely held its ground or rolled positions forward. The $90,000 strike is now a gravitational center. If price momentum shifts, market makers will be forced to chase the rally to remain delta-neutral.

The BTC options market is showing signs of stabilizing as extreme downside fear begins to mean-revert.

Sean McNulty, APAC derivatives trading lead at FalconX, noted this shift, highlighting that a weekly close above $75,000 would invalidate the recent bearish breakdown. The risk here is asymmetric. Bears are selling into a hole while the structural flows of the market are primed to pull price upward toward the liquidity-rich $90,000 zone.

Institutional Divergence

The discrepancy between price action and order flow is stark. While the CryptoSlate report highlights the $8.65 billion expiry wall, on-chain data shows institutions capitalizing on the fear. Bitwise CEO Hunter Horsley confirmed that institutional investors are treating the sub-$70,000 dip as a “new crack at the apple,” accumulating while long-time holders waver.

This creates a dangerous setup for short sellers. They are fighting not just the technical support at $70,000, but a wall of institutional bids and a derivatives market that mathematically benefits from higher prices. The February 27 expiry, with its smaller $6.1 billion notion, will serve as the opening salvo. How traders roll that risk into March will determine if the $90,000 magnet activates early.