Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
A staggering $22.6 billion in Bitcoin (BTC) options are set to expire this Friday, with bullish positions currently holding a significant advantage, particularly if the cryptocurrency maintains its price above the critical $112,000 support level. Despite this optimism, persistent macroeconomic uncertainties continue to loom, presenting a potential last-minute opportunity for bearish sentiment to emerge.
Bullish Bets Dominate September Expiry
The upcoming September monthly options expiry is characterized by a strong lean towards bullish bets. Call options, which grant the holder the right to buy Bitcoin, substantially outnumber put options, which grant the right to sell. This reflects a consistent optimistic outlook among cryptocurrency traders.
Specifically, open interest for call positions stands at $12.6 billion, approximately 20% higher than the open interest for put contracts. This initial advantage for call holders is contingent on Bitcoin’s price sustaining above the $112,000 mark at 8:00 am UTC on Friday.
Market Dominance and Strike Price Distribution
Deribit remains the dominant platform for Bitcoin options, accounting for $17.4 billion of the total open interest for Friday’s expiry. Other significant exchanges include OKX and CME, each trailing with $1.9 billion in open interest.
An analysis of strike prices at Deribit reveals a concentration of neutral-to-bearish bets in the $95,000 to $110,000 range, which is becoming increasingly improbable given current price action. On the bullish side, a substantial $6.6 billion in call open interest is positioned at $120,000 and above, though approximately $3.3 billion of these are considered realistically in play.
Conversely, 81% of put options on Deribit are set at $110,000 or lower, leaving only about $1.4 billion active. This setup points strongly towards neutral-to-bullish outcomes, though it excludes more complex strategies such as selling puts to gain upside exposure.
Options Skew Signals Underlying Caution
Despite the apparent bullish positioning, the Bitcoin options delta skew metric indicates a moderate level of fear at 13%. This suggests that put options are trading at a premium over equivalent call contracts. Under neutral market conditions, this gauge typically ranges between -6% and 6%, implying that whales and market makers harbor some unease regarding potential downside risks around the current $113,500 price level.
$112,000: The Pivotal Price Point
The outcome of the expiry largely hinges on Bitcoin’s performance relative to the $112,000 level. Different price ranges at Deribit present varying net advantages for calls or puts.
If Bitcoin settles between $107,000 and $110,000, put instruments would gain a net advantage of $1 billion. A more balanced outcome is projected if the price lands between $110,100 and $112,000, with $1.4 billion in calls versus $1.4 billion in puts. However, a move between $112,100 and $115,000 would significantly favor call options by $660 million.
Macroeconomic Headwinds Persist
The possibility of bearish options strategies cannot be entirely discounted, as market sentiment could swiftly change based on upcoming macroeconomic data. Key releases scheduled for Thursday include US gross domestic product (GDP) data, weekly jobless claims, and new Treasury auctions.
An increasingly fragile economic environment could support additional interest rate cuts by the US Federal Reserve, which is typically a bullish catalyst for risk-on assets like cryptocurrencies. However, ongoing concerns about labor market weakness could fuel risk aversion, placing negative pressure on Bitcoin’s price.
Outlook for the Expiry
While the September monthly Bitcoin options expiry is currently tilted in favor of the bulls, the influence of macroeconomic factors and the critical $112,000 price point mean that a decisive drop cannot be entirely ruled out. Traders will be closely watching both price action and economic indicators as Friday approaches.
