The 38th week of the year has established itself as a challenging one for bitcoin, currently recording an average return of -2.25%. Historical data from Coinglass reveals that only weeks 28 and 14 have performed worse, with returns of -2.78% and -3.91%, respectively. As it stands, bitcoin is trading down nearly 2% at around $113,000. Concerns over the upcoming September monthly options expiry have intensified, with analysts pointing to a maximum pain level at $110,000. This level represents the strike price at which the largest volume of options contracts is likely to expire worthless, potentially leading to further declines for the cryptocurrency.
Market enthusiasm appears to be diminishing as well. The perpetual funding rates for bitcoin, which indicate the ongoing cost of maintaining leveraged positions in perpetual futures contracts, have recently dipped to 4%, marking one of the lowest rates seen in the past month. A low positive funding rate often signifies reduced demand for long positions, suggesting that speculative activity in the market is cooling off. Additionally, implied volatility (IV), an indicator of market expectations for future price fluctuations, is hovering at historic lows of 37.
Despite this weekly downturn, bitcoin has shown resilience, up 4% in September and 6% for the current quarter. With approximately 14 weeks remaining in the year, many of those weeks have historically yielded positive returns, suggesting that the market might be experiencing a calm phase before potential volatility emerges.
In contrast, gold has been on an impressive upward trajectory, experiencing a 1% increase on Tuesday alone and boasting a year-to-date rise of more than 42%. This performance continues to overshadow bitcoin, contributing to a more cautious sentiment in the crypto market. Moreover, the recent substantial gains in artificial intelligence and high-performance computing stocks, particularly notable examples like IREN (IREN), may also be drawing investor attention away from bitcoin in the short term.
