Crypto Investors Brace for BTC, ETH Options Expiry, PCE Inflation Data

The Bitcoin (BTC) price has been showing major strength ahead of the Friday options expiry surging past $65,000 levels for the first time since August 1. A total of $5.8 billion BTC options are set to expire today along with the PCE inflation data release for the month of August. Similarly, ETH options with $1.9 billion in notional value will expire today.

BTC, ETH Options Expiry on the Radar

As per the Deribit data, a total of 89,027 Bitcoin options will expire today with a notional value of $5.8 billion, and a put call ratio of $0.64 suggesting bullish sentiment ahead. Also, the max pain point for BTC options currently stands at $59,000.

As we know, $65,000 has been historically a major resistance for Bitcoin. Thus, bulls need to defend this level for the Bitcoin price rally to continue. The Bitcoin price is currently trading at $65,365.65 with the highest September gains over the past decade.

On the other hand, the spot Bitcoin ETFs saw major inflows on Thursday, suggesting that the institutional demand for the asset class remains intact. Speaking about the current options expiry, Luuk Strijers, chief executive officer of crypto derivatives exchange Deribit said:

“Of the BTC options expiring, about 20% is in the money. This larger expiry is likely to heighten market volatility or activity as traders close or roll over their positions, which could also impact price.”

With the quarterly delivery bringing shifts in positions and releasing margins, implied volatility (IV) across major contracts remains low. As IV faces continued downward pressure, the next two weeks will offer an ideal time to set up positions for potential gains in Q4. One of the popular Bitcoin developers, Adam Back also stated the start of a major rally in October.

getting ready for uptober 🟩

— Adam Back (@adam3us) September 27, 2024

Apart from BTC, 718,000 ETH options, valued at $1.9 billion, will also expire, with a put/call ratio of 0.47 and a max pain point of $2,500. The Ethereum price has shown strength with the Ethereum funding rates suggesting a possible rally to $3,000.

All Eyes on August Inflation Data

The announcement of rate cuts by the Federal Reserve and the PBoC has already led to a crypto market surge along with global equities. Thus, all eyes will be on the PCE inflation data for August, with an expectation of a 0.2% surge over the previous month. Speaking on the development, analysts at TD Securities said:

“Core PCE inflation likely stayed under control in August, with prices advancing at a soft 0.15% m/m pace. Given shelter price strength acted as a key driver of core CPI inflation, the core PCE will not increase as much. Headline PCE inflation likely printed an also soft 0.10% m/m. Separately, we expect personal spending to moderate, rising 0.2% m/m and 0.1% m/m in real terms.”

Looking at the developments in Japan, Shigeru Ishiba has won against arch-nationalist Sanae Takaichi to become Japan’s next Prime Minister. Arthur Hayes joked that the crypto community would have voted Takachi who would have continued with “Abenomics”, referring to the economic policies of former Prime Minister Shinzo Abe, and continued for 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