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(Bloomberg) -- Bitcoin’s largest options expiry of the year is colliding with geopolitical volatility that shows no sign of letting up with make or break peace talks uncertain.

Roughly $14 billion of Bitcoin options are set to expire Friday, as measured by the number for outstanding contracts, known as open interest. The quarterly rollover — which wipes out close to 40% of open positions on the dominant Deribit exchange — comes amid conflicting signals on the prospect of a halt to the nearly month-long war in the Middle East.

The overlap is sharpening a key question for traders: whether the expiry has been artificially muting Bitcoin’s price swings and if its removal will expose the token to a sharper move driven by geopolitics.

Bitcoin has been stuck between roughly $60,000 and $75,000 in recent weeks, drifting well below its October 2025 peak of around $126,000 after a market-wide crash on Oct. 10. The lack of direction has persisted despite geopolitical tensions and intermittent inflows into US exchange-traded funds. Bitcoin fell as much as 4% to $68,122 in the US on Thursday, as investors withdrew $171 million from spot ETFs. The cryptocurrency was trading around $68,700 early Friday in London.

Derivatives positioning helps explain the calm, according to market participants. Institutional investors spent much of the first quarter selling upside bets — effectively wagering that prices wouldn’t rise sharply — to generate income in a subdued market, said James Harris, chief executive officer at asset manager Tesseract. That activity shifted risk onto market makers, who have been buying on dips and selling into rallies to keep their exposure balanced.

The result has been a dampening of volatility, traders say, with price action repeatedly gravitating toward a so-called “max pain” level — the point where the largest number of options expire worthless — near $75,000. In practical terms, those hedging flows have acted like a magnet, nudging Bitcoin higher while capping gains.

“The hedging flows might pull price action toward that level as settlement approaches but effectively cap the range,” Harris said.

Once the contracts roll off, the mechanical buying and selling tied to hedging will fade, potentially leaving Bitcoin more exposed to external catalysts. And those catalysts are mounting. On Thursday, President Donald Trump pushed back his deadline for Iran to strike a deal with the US or face more attacks, saying talks with the country were going “very well.”

“Without clear direction from the Middle East, Bitcoin is likely to stay in the $70,000–$75,000 zone,” said Andreja Cobeljic, head of derivatives trading at AMINA Bank, adding that the upper bound could act as both a magnet and resistance. A credible ceasefire could push Bitcoin above $75,000, triggering further gains as bearish positions are unwound. Failure in negotiations, however, may drag the token back toward the rising trend line at $68,500, he added.