Bitcoin BTC/USD tapped the $65,000 mark in Thursday trading and is up 1.7% over the past 24 hours off the back of another strong day of ETF inflows on Wednesday.
What Happened: Bitcoin spot ETFs on Sep. 25 recorded a net inflow of $106 million, marking five consecutive days of positive inflows, according to data from SoSo Value.
BlackRock‘s Bitcoin ETF, IBIT, reported a particularly strong inflow of $184 million, indicating robust demand. Cumulative net inflows are approaching the $18 billion mark, currently at $17.94 billion.
Similarly, Ethereum ETH/USD spot ETFs attracted net inflows totaling $43.2 million, with Grayscale’s ETF ETHE alone contributing $26.6 million.
What Options Data Is Saying: These inflows come at a time when over $5.8 billion worth of Bitcoin quarterly options are set to expire on Friday.
This expiry is the second-largest by open interest to date, and market analysts anticipate increased volatility as traders adjust their positions.
“This event is expected to trigger increased market volatility as traders either close or roll over their positions,” Illia Otychenko, Lead Analyst at CEX.IO told Benzinga.
Most of the volume for the Sep. 27 expiry is centered around the $65,000 strike price.
However, open interest data initially showed traders expecting a much higher Bitcoin price by this date, with substantial interest at the $80,000 and $90,000 levels.
Despite the adjustments, a large portion of contracts remain “in-the-money,” meaning they are profitable. This could potentially fuel further bullish momentum in the market.
Looking ahead, the next three expiry dates – Sep. 28, Oct. 4, and Oct. 11 – currently show open interest levels that are 10 times smaller than that of Sep. 27.
Nevertheless, interest is quickly growing and could surge as traders reposition post-Friday's close.
Otychenko points out that “bearish sentiment dominates these near-term expiries, with the highest interest at the $60,000 and $62,000 strikes.”
This indicates that traders expect Bitcoin to either consolidate or experience a mild correction in the coming weeks.
Further out, the Dec. 27 expiry, which holds the largest open interest overall, reflects market optimism for Bitcoin in Q4.
The $100,000 strike price stands out with the highest volume and open interest, signaling positive sentiment for Bitcoin’s year-end prospects.
What Technical Analysis Is Saying: From a technical perspective, Bitcoin recently retested the 0.382 Fibonacci retracement level, a key support zone.
It bounced off the 50-period Simple Moving Average (SMA) on the four-hour chart and is currently consolidating within the $62,700-$65,000 range.
The asset is also approaching a three-week ascending support line, which could be crucial in determining its next move.
Should this support hold, Bitcoin may attempt to break above the $65,000 resistance level.
However, a breakdown below this support could reinforce bearish momentum, particularly given the bearish divergence evident on the four-hour chart.
Greekslive provided additional insights into the market’s current state, noting that implied volatility (IV) levels are down significantly across major terms as the quarterly delivery approaches this Friday.
“This is a relatively small quarterly delivery, with BTC’s options position at 33% and ETH’s at 38% of total holdings this quarter,” they explained.
Recent large Block put option deals suggest that traders are actively moving their positions. Looking ahead, the next quarter covers the U.S. election, adding another layer of uncertainty.
Despite this, overall implied volatility remains low, having been below current levels for just under 30% of the time in the past year.
This evolving landscape will be a key focus at Benzinga's Future of Digital Assets event on Nov. 19, where industry experts will discuss strategies for managing risks and capturing opportunities in the rapidly changing crypto market.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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