Bitcoin Options Market Reveals Weak Spot Ahead of Fed Decision

Bitcoin's options market has seen a significant increase in open interest ahead of the Federal Reserve's September 16 decision, with 130,670 BTC in open interest compared to 79,003 BTC for August. Martin Lee from DWF Labs notes that most of this gap is due to traders rolling positions into quarterly expiries, which are common at this time.

However, a closer look at the data reveals that some 27% of September's open interest sits more than 30% away from spot, indicating cheap, far-dated wings that carry little chance of ever coming into play. Lee suggests that the most relevant near-spot upside zone is between $78,000 and $82,000, where three separate lines together hold around 14,000 contracts.

The book runs 1.8-to-1 in favor of calls, with heavier downside protection at $60,000 and below. Lee warns that a sharp move down into the low 70s would land in the thinnest part of the book, where there is little protection against such a move.