Bitcoin (BTC) is approaching the $90,000 level as it continues its upward trend, with developments in the options market increasing price volatility. The upcoming three-month options expiration on Friday could trigger volatility, particularly due to market makers’ positions. Bitcoin’s rise towards $90,000 could escalate price volatility in the options market. The three-month options expiration on Friday, especially due to market makers’ positions, might set the stage for price fluctuations. Market makers, also known as dealers or MM’s, who are responsible for providing liquidity in the options market, try to maintain a neutral position in the market by taking the other side of trades. They do this by balancing their positions in the spot and futures markets through hedging activities. Their profits generally come from the spread between the buying and selling prices. Around the $90,000 level, market makers are holding a “short gamma” position, according to Deribit bitcoin option data provided by Amberdata. A short gamma position means that market makers would need to buy when prices rise and sell when they fall, a behavior that could heighten volatility in the market. Griffin Ardern, head writer of BloFin Academy and president of BloFin Research and Options, commented to CoinDesk that negative gamma could continue to influence markets post-expiration, stating that “MM’s hedging behavior may further increase price fluctuations.” However, Ardern believes that in the current market conditions, an upward price movement seems more likely. Gamma represents a metric that measures the sensitivity of option prices to changes in the underlying asset’s price. Holding a short gamma position makes market makers more sensitive to volatility. This situation can lead to financial losses during high volatile periods. Therefore, when market makers hold a short gamma position, they increase their trading activities in line with market movements. Market makers follow an opposite strategy when they are in a long gamma position. For example, at the end of last year, market makers held a long gamma position at the $90,000 and $100,000 levels. This helped the price consolidate within that range. Charts show gamma changes at different price levels throughout option expiration dates. It is expected that after the three-month option settlement on Friday, the $90,000 level will continue to have the most negative delta. This suggests that market makers’ hedging behavior may continue to increase volatility. According to Ardern, the dealer gamma profile that will emerge after Friday’s expiration for BTC will resemble that of the gold-backed PAXG token. “PAXG has a Gamma Exposure (GEX) distribution similar to BTC after the impact of expiring options is removed. The price finds support after a significant drop and faces resistance during strong rallies,” stated Ardern. As Bitcoin nears the $90,000 level, the balance in the options market could escalate price volatility. The hedging strategies of market makers and the effects of option expirations indicate that BTC may experience volatile trading in the coming days.