Crypto faces critical tests this week as quarterly options collide with major US inflation readings, resulting in convergence that allows the rallies to gain momentum or weakness.
The $22.3 billion Crypto option will expire as the third quarter ends on Friday, according to Options Exchange Deribit. In the end, the Bitcoin option, which has an expected value of $17.06 billion, has expired.
said Greg Magadini, derivatives director for Options Analytics platform Amberdata Decryption The current Bitcoin expiration cycle must be “maximum on the board.”
Dealer positioning “a lot of short gamma of $109,000 and $108,000,” he says, referring to situations where these price levels need to be maintained to prevent sudden movements.
Bitcoin’s short-term movements rely heavily on option dealers and large institutions hedging positions in real time. Exposure to “gamma,” a measure of how quickly hedges need to adjust, helps to amplify or stabilize price fluctuations.
A short gamma position means dealers could be forced to pitch to a market that is falling and declining.
According to the data, $108,000 is important for Bitcoin traders. Failure to hold above this level could lead to a vending cascade, independent of the August core PCE release. Decryption I was told.
Given the dealer’s short gamma positioning and volatility is around 35%, Magadini expects it to fall below $108,000 to trigger a “two standard deviation movement” especially when the market is weak.
Bitcoin is currently trading at $109,100, recording a 3.8% loss on Thursday. In total, top ciphers have reduced by 6.50% over the past week. Co Ringecko The data will be displayed.
Currently, all eyes are in the core PCE release and are scheduled for 8:30am today. The monthly forecast is around 0.2%, slightly lower than last month’s 0.3%.
Higher than expected releases may be enhanced Recent bounces for dollars And it will exacerbate the continued revision of Bitcoin, experts said earlier Decryption.
However, softer core PCEs could form “pin from options expiration dates,” and “may allow for loose and sharp movements,” says Maja Vujinovic, CEO and co-founder of digital assets at FG Nexus, the company that NASDAQ staged, focusing on Ethereum’s accumulation and yield. Decryption.
Despite the short-term, joking reactions about the release of the inflation report, she expects a constructive fourth quarter of the crypto market, due to improved demand and liquidity in spot exchange sales funds.
Magadini repeated Vizinovic’s outlook, pointing out that there is a downside risk in the short term, driven by uncertainty about the Fed’s path and weaknesses in the risky assets.
“We expect prices to be dramatically higher in the long run. If we replenished the inflation war halt… we could easily see Bitcoin starting trading over $250,000.”
The options data also supports Bitcoin’s long-term bullish sentiment, proven by buying a large number of year-end call options on strikes of $120,000 and $140,000.
