The Market Reacts to U.S. Jobs Report
The world’s largest cryptocurrency, Bitcoin, experienced a decline on Thursday as traders awaited the release of Friday’s U.S. jobs report. Meanwhile, the Dow Jones Industrial Average rose by 0.1%, and the S&P 500 increased by only 0.8%.
The upcoming U.S. jobs report is expected to provide insights into whether current monetary policies are effectively addressing inflation. Additionally, it may impact interest rate expectations ahead of the Federal Reserve’s final meeting of the year on December 13th.
As of 1:22 p.m. ET, Bitcoin was down 1.2% and trading at $43,383, which typically correlates with major equity indices.
Open Interest Indicates Bullish Expectations
Despite a couple of days of minor declines, open interest in Bitcoin options on the Deribit derivatives exchange suggests a significant number of outstanding calls for the $75,000 strike price set to expire at the end of January. Traders who purchase the right to buy Bitcoin at this level indicate their belief that the market price will continue to rise.
According to Deribit Chief Commercial Officer Luuk Strijers, these open contracts could have been sold as part of a $50,000 to $75,000 January call spread. The expectation is that the market will expire somewhere between those strike prices.
Deribit data reveals that there are currently 3,684 outstanding Bitcoin option calls for the $75,000 strike price, amounting to a notional value of approximately $162 million. These calls are second in number only to those for the $50,000 strike price.
Record Open Interest in Bitcoin Options
The aggregated open interest of Bitcoin options on major centralized crypto derivatives exchanges has reached an all-time high of $17.3 billion, according to The Block’s Data Dashboard. This increase in open interest suggests the entry of new funds into the market, indicating growing participation and potential liquidity.
Deribit’s Strijers attributes the recent Bitcoin market rally to a combination of factors, including optimism surrounding a possible decision from the Securities and Exchange Commission regarding a spot Bitcoin ETF, resolution of Binance’s legal issues, geopolitical tensions, easing inflation concerns, and increased institutional engagement.
Hot Take: Bitcoin Reacts to U.S. Jobs Report and Open Interest
Bitcoin experienced a decline as traders awaited the U.S. jobs report, while open interest in Bitcoin options indicated bullish expectations for the market. The report’s release is anticipated to provide insights into monetary policy and interest rate expectations. Additionally, Bitcoin’s correlation with major equity indices was observed as it decreased in value. The Deribit derivatives exchange showed a large number of calls outstanding for the $75,000 strike price, suggesting an expectation of rising prices. Record open interest in Bitcoin options across major exchanges indicates increased market participation and potential liquidity. The recent Bitcoin rally can be attributed to various factors, including regulatory developments and institutional engagement.
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