In the lead-up to the closely watched U.S. nonfarm payrolls report, a growing number of crypto traders are turning to bitcoin put options to hedge their bets. The heightened demand for contracts with strike prices as low as $80,000 and $90,000 underscores the cautious sentiment prevailing in the market, even as bitcoin hovers near the $97,000 mark.
According to data from Singapore-based trading firm QCP Capital, their desk has witnessed persistent interest in BTC puts expiring on February 28 with an $80,000 strike and February 21 puts with a $90,000 strike. This appetite for protective positions suggests that some traders are bracing for the possibility of a downside move in the largest cryptocurrency’s price.
Jobs Data Holds the Key
The focus on bitcoin options comes as market participants await the January nonfarm payrolls figures, slated for release by the U.S. Bureau of Labor Statistics at 8:30 a.m. ET (13:30 UTC) today. Economists polled by Dow Jones anticipate an increase of 170,000 jobs, a slowdown from December’s impressive gain of 780,000.
The jobs report often acts as a crucial gauge of the U.S. economy’s health and plays a significant role in shaping Federal Reserve policy decisions. A stronger-than-expected reading could bolster the case for the Fed to maintain a hawkish stance and potentially dent hopes for interest rate cuts later this year. Conversely, a weaker print might fuel expectations of a dovish pivot, a scenario that could bode well for risk assets like bitcoin.
As we head into tonight’s non-farm payroll report, market sentiment remains cautious. The desk continues to observe interest in BTC 28FEB25 80K puts and BTC 21FEB25 90K puts, reflecting persistent caution despite the skew still favoring calls.
– QCP Capital, in a Telegram broadcast
Offsetting Bullish Bets
While the demand for puts showcases the cautious undercurrent, it’s worth noting that the overall options market skew still leans bullish. This suggests that some traders are maintaining upside bets even as they hedge against potential downside risks.
The bitcoin options market has become an increasingly important tool for traders looking to manage risk and express their views on the digital asset’s prospects. The focus on puts with $80,000 and $90,000 strike prices indicates that some market participants see these levels as key support zones that could come into play if the jobs data sparks a sell-off.
Bracing for Volatility
Given bitcoin’s sensitivity to macroeconomic developments, the nonfarm payrolls release has the potential to trigger significant volatility in the cryptocurrency’s price. Traders’ positioning in the options market serves as a valuable indicator of the level of caution and the potential downside risks being priced in.
- A strong jobs report could reignite concerns about persistent inflation and prompt the Fed to maintain a tighter monetary policy stance for longer.
- A weak jobs print, on the other hand, might reinforce expectations of a more accommodative Fed and provide a tailwind for bitcoin and other risk assets.
As the U.S. employment figures loom, the bitcoin options market is reflecting a mix of caution and anticipation. While put buying activity suggests some traders are bracing for a potential pullback, the overall market sentiment remains balanced, with bullish bets still in play. The nonfarm payrolls data will likely play a crucial role in tipping the scales and determining bitcoin’s near-term trajectory.
