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Bitcoin’s recent pullback from $80,000 has prompted traders to reduce bullish exposure, while U.S. inflation data due today and tomorrow is expected to show a re-acceleration in price pressures.
“Call skew continues to soften as traders shed bullish exposure following early-week weakness,” AI-powered trading terminal OrderX said on X.
Options skew measures the bias for calls, or bullish option positions, relative to puts, or insurance against price drops. A positive figure means traders are chasing upside via calls.
According to OrderX, the call bias is weakening. This comes as bitcoin’s spot price retraces to $78,000 from recent highs above $81,000. The pullback comes amid rising oil prices, elevated bond yields and growing expectations the Fed will raise interest rates.
Add to that renewed inflation concerns, and the market looks challenging for bulls.
U.S. PPI, scheduled for release at 8:30 a.m. ET on Thursday, is expected to show that producer-level inflation rose 0.4% month over month in August, following an unchanged reading in July. That would take the annualized reading to 5.3% from 4.7%.
Such a sharp increase could further strengthen expectations of a Federal Reserve rate increase next week, potentially lifting the dollar and putting additional pressure on bitcoin.
CME FedWatch data currently points to a more than 60% chance of a rate hike. Friday’s CPI report is also expected to show a re-acceleration in inflation. Stay alert!
Read more: For analysis of today's activity in altcoins and derivatives, see Crypto Markets Today . For a comprehensive list of events this week, see CoinDesk's "Crypto Week Ahead."
The chart shows bitcoin’s hourly price swings in candlestick format over four weeks.
Recently, prices have traded back and forth between $76,000 and $82,000. This range play looks like a typical bull breather seen after steep rallies, like the one seen in August from $64,000 to $80,000.
A firm move above $82,000 would mark a fresh bullish breakout, signaling a resumption of the rally. By contrast, a break below $76,000 would flip the immediate outlook bearish.