Approaching the $90,000 level, Bitcoin (BTC) continues its upward trend as developments in the options market increase price volatility. The three-month option expiry scheduled for Friday could trigger volatility due to market makers’ positions. As BTC nears $90,000, developments in the options market could heighten price volatility. The upcoming three-month option expiry on Friday, especially due to market makers’ positions, might lead to price movements. Market makers, also known as dealers or MM’s, obligated to provide liquidity in the options market, simultaneously act to keep a neutral position in the market by taking the other side of trades. They balance their positions in spot and futures markets to hedge risks, typically making profits from the spread between buy and sell prices. The Increasing Volatility Risk Around $90,000 According to Deribit Bitcoin option data provided by Amberdata, market makers hold a “short gamma” position at the $90,000 level. A short gamma position means market makers will have to buy when prices rise and sell when they drop, potentially increasing market volatility. Griffin Ardern, the head writer of BloFin Academy and president of BloFin Research and Options, stated to CoinDesk that post-expiry negative gamma could continue to impact the market, remarking, “Market makers’ hedging behavior could further increase price fluctuations.” However, Ardern believes that under current market conditions, an upward price movement appears more likely. Gamma measures the sensitivity of option prices to changes in the underlying asset’s price. Holding a short gamma position makes market makers more susceptible to volatility, which can lead to financial losses during periods of high volatility. Therefore, when market makers have a short gamma position, they increase trading activities in sync with market movements. Market Makers’ Historical Positions and the Current Situation When market makers hold a long gamma position, they follow an opposite strategy. For instance, at the end of last year, market makers had long gamma positions at the $90,000 and $100,000 levels. This contributed to consolidating prices within this range. Charts display gamma changes at various price levels throughout the option expiration dates. It is predicted that after the three-month option settlement scheduled for Friday, the $90,000 level will continue to have the most negative delta. This suggests that market makers’ hedging behavior could further increase volatility. Ardern stated that BTC’s dealer gamma profile after Friday’s expiration would resemble that of the gold-backed PAXG token. “PAXG has a Gamma Exposure (GEX) distribution similar to BTC’s after the impact of expiring options is removed. The price finds support after a significant drop and faces resistance during strong rallies,” Ardern said. As Bitcoin nears the $90,000 level, the market balances in the options market could heighten price volatility. The impact of market makers’ hedging strategies and option expirations indicate that BTC could follow a volatile path in the coming days.