Despite bitcoin having rebounded earlier in the European trading session, it remains under 1% higher in the last 24 hours. With August nearly at an end, the leading cryptocurrency appears poised to finish the month in the negative, repeating a trend seen over the past three years.
Nonetheless, this marks the most favorable August performance since 2021, and there are indicators in the options market that suggest potential gains may materialize before the month closes out.
Bitcoin and ether options worth over $14.6 billion are slated for expiry on Friday, with the “max pain” level set at $116,000. This is the strike price where the maximum number of options expire worthless, typically causing the most financial distress to option holders while benefiting sellers. As this level exceeds the current price, sellers are incentivized to drive BTC prices higher towards it to reduce their costs.
The CoinDesk 20 Index, which examines the broader market, has seen a 3.2% increase in the past day, while the CoinDesk 80, which covers a broad range of smaller tokens, has gained 4%.
In the longer view, bitcoin’s 200-day moving average has just surpassed the $100,000 mark. BTC has traded above this average since late April, highlighting the strength of its long-term upward trend.
The 200-day moving average serves as a key long-term trend indicator, smoothing price movements over approximately six months, which aids investors in differentiating between bullish and bearish market conditions.
Derivatives Positioning
- Bitcoin open interest (OI) across leading derivatives platforms has begun to decline, which aligns with the downward price movement seen in recent days, signaling that traders are frequently closing their leveraged positions.
- Current BTC OI is $30.3 billion, just beneath its all-time high of $32.6 billion, according to Velo data. The three-month annualized basis remains on the rise, now sitting at 8%-9% across all exchanges, suggesting the basis trade is still yielding profits.
- In the options arena, bitcoin’s upward-sloping implied volatility curve indicates that the market anticipates elevated long-term volatility compared to the short-term, although other indicators suggest a more immediate bearish sentiment.
- Notably, the recent shift of the 25 delta skew into negative territory for soon-to-expire options reflects a clear change in market mood, with traders paying a premium for puts over calls to secure downside protection.
- This bearish outlook is corroborated by the put/call volume over 24 hours, revealing a noticeable bias towards puts, further indicating that traders are hedging against or speculating on a drop in prices.
- Funding rate annual percentage rates (APRs) across major perpetual swap venues have begun to rebound, now around 8%-10% annualized, as per Velo data.
- Annualized funding for BTC on Binance dipped into the negatives (-0.39%) briefly today before recovering to about 10%. This suggests that, although there were segments of bearish sentiment, the overall market trend is increasingly being supported by traders willing to pay a premium to bet on a price rise.
- Coinglass data reports $266 million in liquidations over 24 hours, with 58% skewed towards shorts. Liquidations in ETH ($99 million), BTC ($47 million), and SOL ($20 million) lead the way in terms of notional liquidations. The Binance liquidation heatmap suggests $111,593 is a crucial liquidation level to keep an eye on in the event of a price increase.
Token Talk
- Cronos countered Tuesday’s bearish crypto mood, surging over 56% following the announcement from Crypto.com and Trump Media (DJT) about their plan to form a $6.4 billion CRO treasury entity.
- Crypto treasury announcements have been nearly daily this past month as firms move to adopt the strategy pioneered by Michael Saylor’s Strategy (MSTR).
- However, pricing often fails to correlate with what might be seen as a favorable event. When Verb Technology Co. (VERB) revealed a $558 million private placement to form a toncoin treasury, TON swiftly dropped by about 10%.
- This CRO agreement is distinct. Firstly, it ties in with Trump Media, a firm associated with President Donald Trump, and secondly — and perhaps more significantly — it provides a use case for the Cronos token originally meant for use predominantly as an exchange token for Crypto.com.
- The arrangement involves establishing a new reward system on Truth Social, enabling users to exchange the platform’s “gems” for CRO tokens, alongside plans for subscription payments and discounted services using CRO.
- Bloomberg highlighted that Crypto.com CEO Kris Marszalek contributed $1 million to Trump’s inaugural committee and has also visited Trump’s Mar-a-Lago estate following his election success.
- CRO is currently priced at $0.225, having previously dipped to $0.141 last week; this news spurred a 1,300% surge in 24-hour trading volume exceeding $1 billion, setting it apart in the market while bitcoin and ether hovered near critical support levels.
