Bitcoin has shown a notable gain of 3% over the past two days, bringing its price to approximately $110,000. This rally comes as derivatives traders are positioning themselves ahead of upcoming U.S. jobs data.
The current landscape in the options market suggests a strong sentiment among traders who are making bullish bets for the expiry on September 26. Observations indicate a significant build-up of open interest at higher strike prices, particularly at $120,000, $130,000, and $140,000, according to industry experts. Sean Dawson, head of research at on-chain options platform Dervie, explained that market makers are predominantly net long gamma. This positioning implies that any increase in Bitcoin’s price could face downward pressure from hedge selling, while price declines could prompt dealers to purchase Bitcoin to maintain their hedges.
Despite the bullish sentiment evident from the open interest, Bitcoin’s implied volatility for the next 30 days remains relatively low at around 30%, indicating a period of restrained price activity. Furthermore, while traders are generally optimistic about the near future, they are still cautious. A key measure of options pricing, the one-week 25 delta skew, which reflects the demand for downside protection, has surged from 6.75 to 12 overnight. This increase suggests that while investors anticipate stability in the market, they are also preparing for the possibility of sudden downturns.
The recent price uptick is notably characterized by flat cumulative volume deltas, pointing to a rise in passive bids rather than aggressive buying. CoinGlass data highlights an increase in passive buying activity, especially at a 10% order book depth. The open interest on perpetual contracts has risen significantly, up by 2.35% to $30 billion in just two days, as traders align their strategies before the release of the crucial employment figures.
Looking ahead, the overall market sentiment is tempered by the historical trend of September, which is often bearish. U.S. investors are reassessing their positions as they approach the close of the financial year on September 30.
The immediate expectations for Bitcoin’s trajectory are closely tied to the forthcoming Non-farm Payrolls report. Dawson suggests that an optimistic jobs report might merely cushion the effects of a typically challenging September rather than catalyze a major bullish rally. He also emphasized that although a rate cut of 25 basis points by the Federal Reserve appears to be highly anticipated, any failure to deliver this at the next Federal Open Market Committee meeting could exacerbate difficulties for the market.
As traders navigate these uncertain macroeconomic conditions, the balance between bullish sentiment and cautious hedging is becoming increasingly pronounced, setting the stage for a potentially volatile September as the market unfolds.
