Cryptocurrency Traders Anticipate Expiration of BTC and ETH Options Alongside PCE Inflation Figures

Bitcoin (BTC) has recently surged to over $65,000 for the first time since August 1st, indicating strong momentum as it coincides with the expiration of Bitcoin options worth $5.8 billion this Friday. This event aligns with the public release of the Personal Consumption Expenditures (PCE) inflation figures for August. Ethereum (ETH), too, will see $1.9 billion worth of options expire today.

Spotlight on BTC and ETH Options Expiry

According to information from Deribit, 89,027 Bitcoin option contracts will mature today, totaling a notional value of $5.8 billion and exhibiting a put/call ratio of $0.64, signaling bullish prospects. The ‘max pain’ price for the expiring BTC options is established at $59,000.

With $65,000 being a critical resistance level historically for Bitcoin, it is essential for market bulls to maintain this position for the rally to persist. The current Bitcoin price hovers at $65,365.65, marking the highest September increase in the past ten years.

Meanwhile, inflows into spot Bitcoin ETFs spiked on Thursday, highlighting sustained institutional interest in cryptocurrencies. Reflecting on the significance of the options expiry, Deribit CEO Luuk Strijers observed:

“Around 20% of the expiring BTC options are currently in the money. This significant expiry event may amplify market movement or trading as positions are closed or adjusted, which could also influence the market price.”

As we approach the end of the quarter, changes in portfolio holdings and the freeing up of margins can have an impact, with implied volatility (IV) across significant contracts remaining low. This downward pressure on IV offers a prime opportunity in the next couple of weeks to establish strategic positions for potential gains in the fourth quarter.

In addition to BTC, the ETH market is also preparing for the expiry of 718,000 options with a total value of $1.9 billion, a put/call ratio of 0.47, and a ‘max pain’ threshold at $2,500. Ethereum’s value has been robust, with Ethereum funding rates implying a possible ascent to $3,000.

Focus Turns to August Inflation Data

Following the Fed’s interest rate cuts and the People’s Bank of China’s policy adjustments, the crypto market has experienced a surge alongside global equities. With that background, the financial world is watching closely for the PCE inflation figures for August, anticipating a 0.2% month-over-month increase. TD Securities analysts offered their insights:

“We expect core PCE inflation to have remained subdued in August, with price increases of around 0.15% month-over-month. The core PCE’s increase will likely be less pronounced than the core CPI due to shelter price dynamics. We anticipate headline PCE inflation to show a similarly modest 0.10% month-over-month rise. Separately, consumer spending is likely to exhibit some temperance, with a predicted 0.2% month-over-month increase and a 0.1% real term adjustment.”

In Japan’s political scene, Shigeru Ishiba has succeeded over Sanae Takaichi in the race for prime ministership. Arthur Hayes humorously remarked that the crypto sphere would have preferred Takaichi, who promised to uphold ‘Abenomics,’ the economic strategies of former Prime Minister Shinzo Abe, which involved continued monetary easing.

If #crypto had a vote, we would want Takaichi. She wants to continue “Abenomics” which means more money printing and toleration of a weak yen. pic.twitter.com/1yR1yCMTMS

— Arthur Hayes (@CryptoHayes) September 27, 2024