Key Updates
- Both Bitcoin and the CoinDesk 20 Index have seen declines over the last 24 hours.
- Nearly all members of the broader index have dropped since midnight UTC, except for one.
- Negative positioning in the derivatives market is noted, with more than $4.5 billion in crypto options set to expire on Deribit this Friday.
Market Overview
Bitcoin remains confined within its range since late August, experiencing a further decline to approximately 0.7% lower. The sentiment in the options and perpetual futures markets is notably bearish with perpetual funding rates dropping.
“Open interest is tilted toward puts… suggesting downside protection remains a key theme,” stated derivatives exchange in a post on X.
Derivatives Insights
- Derivatives positioning for Bitcoin has calmed; momentum appears muted rather than completely stagnant.
- Open interest in perpetual futures has decreased from a peak of around $33 billion to about $30 billion.
- The three-month yearly basis has also been compressing to about 5%-6% across major platforms, indicating only marginal profitability in carry trades.
- Options data presents conflicting signals: while long-term volatility expectations are rising, short-term views remain downbeat.
Token Insights
- The DeFi token World Liberty Financial (WLFI) linked to Donald Trump has plunged to a record low due to fading interest after its trading debut.
- Amid considerable drawdowns, profit-taking may occur quickly as his supporters reconsider their positions, notably affecting WLFI token’s trading activity.
Closing Thoughts
Bitcoin and crypto markets are gearing up for a turbulent week as the U.S. jobs report approaches, further influencing market sentiment and price movements.
