Important takeouts:
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Enhanced Bitcoin Put Options Premium Signals Careful Trader Feelings.
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US job openings near five years’ lowest, fears of a recession and increased risk of potential economic slowdowns.
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$518 million flowed into Bitcoin ETFs on Monday, but public companies continue to tighten their available supply.
As the derivatives market shows growing fear, pro-BTC traders are worried about retaining downside risk despite recent profits of $114,000. Traders are likely considering whether these indicators reflect broad concerns about global economic growth or fears inherent in cryptocurrency markets.
Bitcoin Skew Metric touched on Tuesday at 5%, but ultimately returned to 8%, indicating a higher premium for PUT (selling) options. Under neutral conditions, BTC skew usually ranges from -6% to 6%. A failed attempt to regain an annoyed trader of $115,000, especially as gold remains bullish and is just 0.6% below Tuesday’s all-time high.
Gold has risen 16.7% over the past two months, but the US Dollar Index (DXY) has consistently struggled to regain the 98.5 level, reflecting weaker confidence in the US government’s financial situation. A weaker US dollar tends to slow consumption as imports become more expensive, reducing tax revenue from international revenues for international US companies.
Investors are concerned that the US economy could be at risk after job market data continues to show weakness. The U.S. Bureau of Labor Statistics reported 7.23 million job openings in August. This is approaching the lowest level in five years. “Federal unemployment insurance claims are about twice as high as last year,” an economist at the Institute for Economic Policy said Tuesday.
The S&P 500 shows resilient resilience amid this uncertainty. Traders are forecasting further interest rate cuts and additional liquidity injections from the US Federal Reserve. Total assets on the federal government’s balance sheet have stabilized in September after 30 consecutive months of decline, showing a potential reversal that could support the risk-on market.
Less constraints on economic policy have a double positive impact on companies as they reduce capital costs and reduce investors’ returns on bonds. Unlike Bitcoin, listed companies offer perspective through dividends, buybacks and opportunities through mergers and acquisitions. Therefore, it does not completely rely on employment levels or broader economic growth.
Bitcoin options that can be put into the call remain stable and show no surge in bearish demand
Despite whales and market makers reluctant to take downside risks, bitcoin traders aren’t necessarily bearish. It is convenient to analyze put-call metrics to determine whether demand for neutral to profit strategies is increasing.
Premiums paid for Put (selling) options are behind the call (purchase) equipment of Delibit. The sudden spikes on Saturday are not typical. The total premium paid that day was less than $13 million. Overall, the data shows no signs of stress or a surge in demand for bear positions.
The $518 million net inflow into the Bitcoin Spot Exchange Sales Fund (ETF) on Monday does not necessarily correlate with gold, providing clear evidence of the demand for independent hedging. Public companies such as Strategy (MSTR), Mara Holdings (Mara), and Metaplanet (MTPLF) may continue to accumulate Bitcoin as a reserve strategy, creating a supply shock.
Ultimately, the reduction in appetite for negative side risk exposures in Bitcoin options should be interpreted to reflect broader macroeconomic concerns rather than bearish expectations.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.