Key takeaways:
Traders decreased bullish positions, indicating mixed market sentiment ahead of Friday’s $22 billion monthly Bitcoin options expiry.
Stablecoin premiums and Bitcoin ETF inflows reflect cautious optimism, suggesting traders might aim for short-term gains.
Bitcoin (BTC) fell to its lowest point in over three weeks, leading to $275 million in liquidations of leveraged bullish positions. Traders are pondering whether the upcoming $22 billion BTC options expiry on Friday accounts for the drop below $109,000 and if institutional investors expect additional price decreases.
At Binance, leading traders reduced long (bullish) positions on Tuesday and Wednesday, causing the long-to-short ratio to dip to 1.7x, the lowest in over a month. As Bitcoin dropped below $112,000, these traders began to adjust their stance, increasing long exposure as the ratio gradually rose back to 1.9x in favor of longs.
In contrast, whales and market makers at OKX took the opposite approach, adding longs between Tuesday and Wednesday, likely anticipating that the $112,000 support would persist. By Thursday, OKX’s long-to-short ratio jumped to 4.2x, the highest in more than two weeks. However, Bitcoin’s drop to $108,700 surprised these participants, prompting them to cut leverage at a loss.
Bitcoin put options poised for a $1 billion lead if price falls below $110,000
Bearish positions for Bitcoin’s monthly options expiry at 8:00 a.m. UTC on Friday focused on the $95,000 to $110,000 range. If bulls do not reclaim the $110,000 mark by then, put (sell) options would gain a $1 billion edge.
Nevertheless, some analysts predict that selling pressure might ease after the expiry, given that BTC derivatives have shown resilience recently, with open interest and funding rates remaining relatively stable despite the recent price fall.
Bitcoin’s two-month futures premium relative to spot markets remained steady at 5%, within the neutral range of 5% to 10%. This suggests limited appetite for bullish positions, while also indicating that shorts are cautious and not heavily betting on further declines. Bitcoin futures open interest stays robust at $79 billion, down 3% over the last two days, according to CoinGlass data.
Additionally, Bitcoin exchange-traded funds saw $241 million in net inflows on Wednesday, indicating moderate optimism among investors. Concurrently, concerns over the US labor market raised by US Federal Reserve Chair Jerome Powell persist. The Labor Department reported on Thursday that continuing jobless claims were relatively stable at 1.926 million for the week ending Sept. 13.
Bitcoin under pressure amid potential US government shutdown
Bitcoin is experiencing pressure as traders grow wary, particularly with worries regarding a possible US government shutdown. A memo from US President Donald Trump’s Office of Management and Budget (OMB), initially reported by Politico, urged government agencies to update plans in anticipation of a potential discretionary funding lapse on Oct. 1.
Demand for stablecoins in China offers further insight into traders’ positioning. Generally, strong interest in cryptocurrencies drives stablecoins about 2% above the official US dollar rate. In contrast, a discount of more than 0.5% often indicates fear, as traders exit the crypto market.
Related: Bitcoin crumbles below $109K, but data shows buyers stepping in
Currently, Tether (USDT) is trading at a mild 0.3% premium compared to the official USD/CNY rate, indicating a neutral market. This suggests that some traders may be investing in cryptocurrencies to take advantage of the recent dip, supporting the view of those expecting gains after Friday’s options expiry.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
