Bitcoin prices have faced back-to-back challenges this week, with the May PCE announced Thursday at 8:30 a.m. ET, and over $10 billion in Bitcoin options to be settled in Deribit on Friday at 8:00 a.m. UTC, the quarterly expiration that concludes the second quarter.
Bitcoin briefly dipped below $60,000 in June and is now trading around $62,500 after a tough June that saw it range between $62,000 and $67,000.
While billions of contracts are already sliding toward settlement, there could be surprises in inflation printing, and subsequent hedging risks a sharper move than the data alone would produce.
We have already seen this play out once this year. On March 27, Bitcoin tumbled towards $66,200 as $14.1 billion in Bitcoin options and $2.2 billion in Ethereum contracts expired and dealer hedges turned into a normal decline that morning, in a market hit by an oil shock, rising yields and fading hopes for interest rate cuts.
Hot PCE inflation background
The previous PCE report showed that the Fed’s coverage remained strong, with overall PCE in April rising 3.8% year over year, nearly double the 2% target, and core holdings at 3.3%, the highest level since October 2023.
Thursday’s announcement covers data for May, when producer prices rose 6.5% annually, the fastest since November 2022, as energy costs related to the Iran conflict tended to slow consumer inflation.
The Fed is keeping an eye on that data. At Chairman Kevin Warsh’s first meeting on June 17, the committee kept interest rates unchanged at 3.50% to 3.75%, withdrew easing language and raised its year-end PCE forecast from 2.7% to 3.6%.
This makes the probability of a rate cut in 2026 close to zero, the probability of a rate hike in December close to 85%, and the CPI in May already at 4.2%. Since then, the two-year bond yield has risen to 4.22%, and the dollar has hit a one-year high.
PCE moves Bitcoin because it resets the price of liquidity, and the higher it gets, the more Fed bailout will become nearly impossible to price, and real yields and the dollar will rise, keeping bonds looking more attractive than non-yielding assets.
Institutional money has already retreated, with Bitcoin spot funds losing a record $4.4 billion in 13 trading days in late May and early June, and the outflows have continued ever since. The ETF lost about $2.27 billion from June to 18, almost all of which came from BlackRock’s IBIT, according to Farside Data.
This removes a steady source of demand at a time when the market needs buyers, and is part of the reason why spot-buying is not as aggressive as it was at the beginning of the year. Weakness in stocks would reverse the pressure, ease yields and the dollar, and reopen the risk-on trajectory crypto bulls have been hoping for since the spring.
Why does option expiration amplify movement?
Friday’s settlement was the biggest of the year, with around 80% of open interest out of the money following the June selloff, and Ethereum contracts also settled on the same morning.
Quarterly maturities are far more nominal than weekly or monthly, which is why 2026 is the largest expiration date. The maximum pain level is around $74,000, about 15% above the spot, but according to Deribit data, the $60,000 put is the downside support and the $80,000 call is the upside hurdle, giving a put-call ratio of 0.87.
Dealers on the other side of these contracts were hedging with spot and futures, and that flow could pull Bitcoin toward and lock in a crowded strike price, or accelerate the move once the price breaks out, which is what kept Bitcoin range-bound throughout the second half of 2025.
The hot print will push Bitcoin towards the $60,000 put cluster and force dealers to rehedge payments. Weak stock prices could cause a relief rally, but the $74,000 max payne level and $80,000 call wall are both above the spot, potentially limiting the distance of an initial rally before the contract is liquidated.
Since the funding for permanent investments is only marginally positive, the leverage is not high, leaving room for surprises that can move the market sharply.
Deribit settles at 08:00 UTC on Friday, so any sharp movements within that window will be reflected directly in the price, and once the contract clears, traders will have thin liquidity over the weekend, potentially extending the move further.
PCE sets macro impulses. The expiration date determines whether it is fixed or amplified. And over the weekend, a decision will be made as to whether or not that will take place, leaving Bitcoin’s current range in preparation for a move that is likely to start with Thursday’s numbers and settle hours later with Friday’s options.
(Tag translation) Bitcoin
