Derivative traders bet on bullish Bitcoin in September

Derivative traders are betting on a bullish Bitcoin in September amid macroeconomic uncertainty and seasonality patterns. Analysts revealed that there’s potential upside volatility for the digital asset.

Bitcoin has dropped 3.3% in the last month, but has bounced back in the last two days by roughly 3% to slightly above $110K. At the time of publication, on-chain data shows that Bitcoin is trading at around $110,630, with a 7.31% increase in trading volume in the last 24 hours to $72.2 billion.

September’s historical bearish seasonality threatens BTC’s price

On-chain data also revealed that Bitcoin has had flat cumulative volume deltas, having a noticeable surge in passive bids at a 10% order book depth. The data shows that BTC’s slight uptick is not being driven by aggressive buying, but rather coincides with more passive buying.

BTC’s price has also been driven by a 2.35% surge in open interest in perpetuals to $30 billion in the last two days. The rise in Open Interest in perpetuals shows that traders are starting to position ahead of this week’s economic data.

Bitcoin closed last month in the red, its first bearish month since April, which drove fears that the drop could continue this month. September’s historical bearish seasonality is also another factor that could see the digital asset falling.

On-chain data revealed that BTC has been bearish for eight of the past twelve Septembers since 2013. The digital asset’s average returns have also dropped about 3.80% for those red months. 

The September Effect is where traders tend to lock in profits after summer rallies or reposition portfolios ahead of Q4. Bearish Augusts since 2013 have led to bullish Septembers, suggesting sellers’ front-running.

Analyst Rekt Fencer argued that September will be bullish for BTC this year, citing its performance in 2017. The chart overlay of 2017 and 2025 shows that BTC slipped sharply in late August, found footing at a key support zone, and then reversed higher.

In 2017, the chart shows that BTC retested the final support level before the price surged to $20,000. Current price mirrors the one in 2017, showing BTC hovering near a multi-month base between $105,000 and $110,000, a level that could be the launchpad for another parabolic uptrend, according to analysts.

Traders expect the upcoming Fed rate cut to skyrocket Bitcoin’s price

Sean Dawson, head of research at Dervie, noted that September’s historical seasonality is causing investors to reassess their positions. He argued that options traders are making bullish bets for the September 26 expiry, with a buildup of open-interest at the $120,000, $130,000, and $140,000 levels.

“Since the market makers are net long gamma, an increase in Bitcoin’s price will most likely be dampened by hedge selling. Similarly, price drops will also be minimized as dealers would be forced to buy to hedge their positions.”

-Sean Dawson, Head of Research at Dervie.

On-chain data shows a 30% implied volatility for BTC in September, while the one-week 25 delta options gauge surged to 12 in the last 24 hours. The data suggests that investors are hedging against a potential drop in Bitcoin’s price this month.

Friday’s upcoming Non-farm Payrolls report could also determine the immediate-term direction of Bitcoin. Dawson believes that a bullish jobs report would mitigate the September damage, rather than spark a major rally.

As previously reported by Cryptopolitan, markets expect the Federal Reserve to cut rates by 25-bps at the September 17 Fed meeting, with 89.7% probability. Dawson also argued that while the 25-bps rate cut is priced in as highly likely, he believes failure to see a cut at the next FOMC will make September a lot more painful.

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