On September 27, Bitcoin will face its second-largest monthly options expiry of 2024, totaling $8.1 billion in aggregate exposure. Currently, 20% of the total bitcoin open interest of $5.8 billion is 'in-the-money', indicating favorable conditions for traders.
The upcoming expiry is critical, as neutral-to-bullish options holders are positioned to benefit if Bitcoin remains above $63,000. However, bearish traders are incentivized to push the price below $60,000, which could thwart bullish momentum.
Recent macroeconomic developments, including a surge in the Chinese stock market and liquidity injections by the People's Bank of China, have created a favorable environment for risk-on assets like Bitcoin. This sentiment is echoed by the US Federal Reserve's interest rate cuts, suggesting a potential push towards $65,000.
Currently, Bitcoin call options valued at $4.9 billion significantly outnumber put options at $3.2 billion, indicating a bullish bias among traders. Notably, 55% of call options are set at strike prices of $70,000 or higher, while 69% of put options are below $56,000, likely to expire worthless.
As the expiration date approaches, the pressure mounts on bears to drive Bitcoin's price down to avoid a $550 million payout to call option holders. Given the supportive macroeconomic backdrop, the odds appear to favor Bitcoin bulls heading into the expiry.