Bitcoin Holds Above $40K Ahead of U.S. GDP, $5.8B Crypto Options Expiry

Bitcoin continues to hold above $40,000 as traders anticipate the release of the U.S. GDP data and a significant crypto options expiry. The leading cryptocurrency has tested dip demand near $38,500 earlier in the week and is now seeking to establish a foothold above the $40,000 mark. Traders are reassessing the possibility of early rate cuts by the Federal Reserve amid the ongoing inflationary crisis. The release of the U.S. GDP data later today is expected to show a retreat in the economy’s growth in the final quarter of 2023. Additionally, an estimated $5.8 billion worth of bitcoin and ether options are set to expire on Deribit, the world’s largest crypto options exchange.

Bitcoin Holds Above $40K Ahead of U.S. GDP, $5.8B Crypto Options Expiry

Bitcoin continues to hold its ground above the $40,000 mark as traders anticipate the release of the U.S. GDP report and a $5.8 billion crypto options expiry. Traders have recently reduced their bets on aggressive rate cuts by the Federal Reserve, signaling a shift in market sentiment.

Traders have scaled back bets of aggressive rate cuts by the Federal Reserve ahead of the U.S. GDP report.

As traders eagerly await the release of the U.S. GDP report, there has been a noticeable decrease in bets on aggressive rate cuts by the Federal Reserve. The ongoing inflationary crisis has prompted traders to reconsider the likelihood of early rate cuts. Fed funds futures currently indicate a 50% chance of a rate cut in March, down from 80% just a month ago. This change in sentiment reflects the uncertainty surrounding the state of the economy and the potential impact on monetary policy.

Bitcoin looks to establish a foothold above $40,000 as dollar index trades flat.

Bitcoin has been making efforts to establish a strong position above the $40,000 mark, with the dollar index showing little movement. Despite a recent dip in demand, Bitcoin has managed to hold steady and regain momentum. The flat trading of the dollar index suggests that the market is awaiting the release of key economic data, such as the U.S. GDP report, before making any significant moves.

Traders see a 50% chance of a Fed rate cut in March, down from 80% a month ago.

Traders have adjusted their expectations for rate cuts by the Federal Reserve, reducing the probability of a rate cut in March to 50%, down from 80% just a month ago. This shift in sentiment is likely due to the ongoing inflationary pressures and the potential impact on monetary policy. The market is closely watching the U.S. GDP report for further insights into the state of the economy and potential policy decisions.

The U.S. GDP data expected to show a 2% seasonally adjusted annualized pace in Q4 2023.

The highly-anticipated U.S. GDP data, set to be released soon, is expected to show a 2% seasonally adjusted annualized pace in the fourth quarter of 2023. This marks a decline from the previous quarter’s reading of 4.9% and represents the lowest reading since the second quarter of 2022. The slowdown in economic growth raises concerns about the state of the economy and possible implications for monetary policy decisions.

Bitcoin options worth $3.75 billion and ether options worth $2.07 billion set to expire on Deribit.

Traders are closely monitoring the expiration of bitcoin and ether options on Deribit, one of the largest crypto options exchanges. Options worth $3.75 billion for bitcoin and $2.07 billion for ether are set to expire soon, accounting for a significant portion of global activity. The expiration of these options contracts may lead to increased volatility in the market as traders adjust their positions.

Call-put skew indicates a shift in market sentiment as traders roll positions forward.

Market sentiment is indicating a shift as traders roll their positions forward ahead of the options expiry. Call-put skew, which measures the difference in implied volatility between call options and put options, has been increasing from earlier lows. This suggests that traders are adjusting their positions and expectations for future market movements. The changing skew reflects the evolving sentiment and uncertainty in the market.

Max pain point for bitcoin’s January expiry options is $41,000, while ether’s is $2,300.

The maximum pain point, or the price level at which options buyers stand to lose the most on expiry, is $41,000 for bitcoin and $2,300 for ether’s January expiry options. In traditional markets, options sellers often try to move the underlying spot market closer to the maximum pain point to maximize their profits. This data provides insights into potential price movements and the behavior of market participants leading up to the expiration of these options contracts.

In conclusion, the bitcoin market remains steady above $40,000 as traders await the release of the U.S. GDP report and the expiration of significant options contracts. The shift in market sentiment regarding rate cuts by the Federal Reserve reflects the ongoing inflationary crisis and its potential impact on monetary policy. The forthcoming U.S. GDP data will provide valuable insights into the state of the economy and may influence future market movements.