The higher-than-expected U.S. CPI in September triggered market concerns, and Bitcoin fell along with U.S. stocks. The Bitcoin futures premium fell below 5%, but the options indicator still brought a glimmer of hope.
US September CPI exceeded expectations, Bitcoin fell with US stocks
The annual growth rate of the US CPI in September was 2.4%, which was lower than 2.5% in August, but higher than the expected 2.3%, triggering market concerns that the Federal Reserve may delay further interest rate cuts, which in turn affected the performance of risky assets such as US stocks and Bitcoin.
After the release of the CPI data, the price of Bitcoin fell further. This morning, Bitcoin once fell below $59,000, but has temporarily stopped falling and is now trading at $60,888.
In addition to inflation data, changes in the job market have also attracted investors' attention. The number of initial jobless claims unexpectedly rose to 258,000 last week, a 14-month high. Although part of the reason may be related to the Boeing strike, it still caused market concerns about the health of the US economy.
Is the outlook for Bitcoin not good?
A key metric in the bitcoin futures market has seen a worrying shift. Under normal market conditions, the bitcoin futures premium, or the difference between the monthly contract and the spot exchange price, should fall within an annualized premium (basis) of 5%-10% to compensate for the long settlement period.
However, on October 10, the Bitcoin futures premium fell below the neutral benchmark of 5%, the first time in two months. It is worth noting that the last time the indicator turned bearish was on August 5, and in the following three days, Bitcoin plummeted 24.6% to a low of $49,268.
The change in the Bitcoin futures indicator reflects the reduction in demand for buy orders (longs) and may indicate that selling pressure will increase in the short term. As of this morning, the Crypto Fear and Greed Index is 32, which is in the fear level and usually represents low trading activity and poor market liquidity.
Bitcoin options delta changes offer a glimmer of hope
While futures markets are showing some negative signals, Bitcoin options data offers some balanced perspective.
The 25% Delta value of Bitcoin options remains close to zero. This means that large traders and market makers have not changed their views on short-term risk-reward, and the sharp drop in the Bitcoin futures premium rate may be due to the unexpected liquidation of leveraged long positions by a few large entities. The drop in the premium rate may be temporary.
"Derivatives traders have not yet bet on a sharp drop in Bitcoin prices." This view provides a glimmer of hope for the market that the current decline may not turn into a sustained bear market trend. It is just a short-term decline affected by sentiment.
Although it looks dangerous, if you look closely, the bears are not as strong as in the previous three times.
On the contrary, the three rises by the bulls all broke the previous high point, which is enough to show that after the market plummeted on August 5, the bulls began to gradually recover.
Currently, Bitcoin is undoubtedly still fluctuating here. Although the price has not broken the previous high, the low point has fallen below 50,000 US dollars, but it quickly recovered.
On the whole, although the trend of Bitcoin gives him a very dangerous feeling, considering the overall trend, BTC is still in a bull market.
