The 23.6 billion worth of Bitcoin options are expiring tomorrow. I spent quite some time reviewing the expiration dates of those with over 5 billion in the past three years and discovered an interesting pattern.

The pattern is as follows: before expiration, there's a dip; on the expiration day, there's a spike; after expiration, the market begins to rebound. But the problem is, 90% of retail traders blindly going long get wiped out, and 80% of those scared out miss the opportunity. The worse the market, the more aggressively market makers harvest.

Take the March 29, 2024, $9.4 billion options expiration as an example. Bitcoin traded sideways around 70,000 before expiration, and after, the market continued to grind, with only about 5% volatility within 72 hours. Looking at the September 27, $5.8 billion options expiration, BTC rose from 59,000 to the 63,000-65,000 range, and on the expiration day, it broke through 66,000 directly, with a 10% volatility over 48 hours, completely wiping out the shorts.

See the pattern? When the current price is far below Max Pain, market makers will push the price up; when it's far above Max Pain, they will push it down. The goal is simple—harvest the options buyers' money.

Here's what the data looks like for this expiration: Max Pain is at 96,000, with a call/put ratio of 0.38 (meaning call options are 2.6 times more than puts), and the current price is around 87,000 as of the 12th, about 10.3% away from Max Pain.

A Put/Call ratio of 0.38 indicates the market is overly bullish. But now, the price is only 87,000, far below Max Pain at 96,000. The market maker's clear goal is to push the price to around 96,000 before expiration, causing shorts to liquidate and most longs to be disappointed, then harvesting the maximum profit.

How do retail traders usually get wiped out? I summarized three ways.

First: High leverage short at low levels. Holding heavy or high-leverage short positions around 87,000, only to be driven up to 94,000-96,000 before expiration, triggering stop-losses or margin calls. After you're out, the price may fall back, and you miss the subsequent opportunities.

Second: Chasing highs and exiting too early. Seeing the price rise, getting caught up in the momentum, going all-in long at 90,000. When it finally reaches 96,000, making a 6% profit, fear kicks in, and you close your position. After expiration, the price drops short-term to 92,000, and you think you've protected your profit. But if gamma pressure eases and the price rebounds strongly to 100,000+, you've already exited, completely missing the main rally.

Third: Confirming entry at high levels. Not daring to go long at 87,000, hesitating at 90,000, waiting for a clear trend confirmation and breakout at 96,000 before entering heavily. As a result, the price quickly pulls back to 92,000 after expiration, trapping you at a relatively high level.

This is the fate of retail traders: shorts get wiped out, chasing highs leads to missed opportunities, and waiting results in top-tick entries. Tomorrow's expiration will likely replay this scene again.