Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin’s short-term price trajectory is poised for a critical decision point this Friday, as a substantial $4.3 billion options expiry could pave the way for a rally towards $120,000. The cryptocurrency recently surged past the $114,000 mark following a positive earnings report from Oracle Corporation, reaching its highest level in over two weeks. However, underlying macroeconomic uncertainties, including weak jobs data and questions surrounding the profitability of artificial intelligence, introduce a layer of complexity to the market’s outlook.
Options Market Dynamics
The upcoming expiry shows a notable imbalance, with put (sell) options dominating at $2.35 billion in open interest, compared to $1.93 billion in call (buy) contracts. This current favoring of put options is considered unusual in a crypto market typically characterized by bullish sentiment from traders. Despite this, call options have gained ground following Bitcoin’s recovery from the $107,500 lows observed earlier in September.
Deribit’s Dominance
Deribit remains the leading platform for these options, holding 75% of Bitcoin’s weekly expiry share. Other significant exchanges include OKX at 13%, and Bybit and Binance each accounting for approximately 5%. Given Deribit’s market leadership, its positioning is widely seen as a crucial indicator for whether Bitcoin can sustain a push beyond the $120,000 threshold in the near term.
Key Price Levels and Potential Outcomes
Current positioning suggests that bearish or neutral strategies appear less favorable for the expiry. On Deribit, less than $125 million in put open interest has been set at or above the $114,000 level. In contrast, over $300 million in call contracts would become active if Bitcoin maintains prices above $113,000 through Friday’s expiry.
This $175 million advantage for call buyers could provide the necessary momentum for Bitcoin to extend its recent bullish trend. If Bitcoin manages to hold above $112,000 leading into Friday’s expiry, call options open interest will surpass put options by $50 million, supporting neutral-to-bullish market strategies. Conversely, a drop below $111,000 by Friday morning would grant put options a $100 million advantage.
Macroeconomic Headwinds and AI Concerns
While Bitcoin’s price saw a boost from Oracle’s positive earnings, with the company’s share price surging 36% due to an announced $455 billion increase in future contracts, broader economic concerns persist. A report from The Wall Street Journal later indicated that OpenAI alone accounted for $300 billion of Oracle’s backlog, leading to questions about the long-term sustainability of AI-driven growth. An X user, sam_mielke, further highlighted a potential “financial cycling” dynamic, suggesting that companies like Nvidia benefit from selling equipment to Oracle, even as Nvidia itself rents out AI datacenter space, effectively converting capital expenditures into revenue.
Trader optimism was also impacted by a significant negative revision in United States employment data earlier in the week. Bank of America equity analyst Ebrahim Poonawala issued a warning that a potential rise in unemployment could lead to a weakening of credit quality across major banks. Ultimately, Bitcoin’s final direction at expiry is anticipated to be heavily influenced by these overarching macroeconomic uncertainties.
