Bearish Sentiment Strengthens Ahead of U.S. Jobs, Options Expiry

Bitcoin BTC$110,783.19 is lower than it was 24 hours ago, down about 0.7%, but still firmly within the range that’s constrained it since the last week of August. The decline’s become a little more pronounced since midnight UTC, with a drop of about 0.9%.

For the broader market, the CoinDesk 20 Index has fallen 1.3% since midnight, with all but one component heading south. XRP XRP$2.8395 is the only token in the green, and that’s up less than 0.1%.

The negative sentiment is echoed in the options and perpetual futures markets. Perpetual funding rates have dropped and put options, or protection against price declines, dominating over calls. More than $4.5 billion in options is set to expire on Deribit on Friday, alongside the U.S. jobs report for August.

“Open interest is tilted toward puts, with notable clustering around the $105,000 to $110,000 strikes, suggesting downside protection remains a key theme,” the derivatives exchange said in a post on X.

Derivatives Positioning

• BTC derivatives positioning has cooled, activity is still there however, with momentum and directional conviction looking muted rather than stagnant.
• Open interest in perpetual futures across major venues has dropped from the recent peak near $33 billion to about $30 billion.
• At the same time, the three-month annualized basis keeps compressing to roughly 5%–6% across Binance, OKX and Deribit, leaving the carry trade only marginally profitable.
• Options data is sending mixed signals. While the upward-sloping implied volatility curve suggests the market expects long-term volatility to be higher than short-term, other metrics point to a more immediate bearish outlook.
• Specifically, the 25 delta skew continues to be either flat or slightly negative, with traders paying a premium for puts over calls to gain downside protection. This short-term bearish sentiment is contradicted by 24-hour put call volume, with calls (63%) dominating options contracts for BTC.
• Funding rate APRs across major perpetual swap venues are little changed around 4%-6% annualized, according to Velo data. Hyperliquid is the only exchange with a rate higher than 6% for BTC, reflecting a pocket of stronger long-term interest relative to other exchanges. Overall, funding dynamics suggest a stable market with isolated signs of froth, rather than broad directional conviction.
• Coinglass data shows $225 million in 24-hour liquidations, with a 50-50 split between longs and shorts. ETH ($65million), BTC ($46 million) and others ($19 million) were the leaders in terms of notional liquidations.
• The Binance liquidation heatmap indicates $110,250 as a core liquidation level to monitor, in case of a price drop.

Token Talk

By Oliver Knight

• Donald Trump-linked DeFi token word liberty financial (WLFI) slumped to a record low $0.174 on Thursday as the token’s popularity begins to fade just days after its trading debut.
• The 21% daily drawdown can be attributed to a number of factors, notably the fact that some token holders are still in profit after purchasing during the token sale. These holders will be tempted to lock in their profits as hype around the project fades.
• One trader made $250 million after buying $15 million during the sale, another lost $2.2 million after going long on WLFI futures.
• While WLFI is linked to the U.S. president, in terms of development and innovation, there’s nothing obvious to differentiate it from the thousands of other DeFi-themed tokens. As a result traders may be inclined to jump ship until they see development of the project.
• “WLFI team, stop sleeping and start taking action. The community is already angry, at least don’t lose the last remaining investors,” one holder wrote on X.
• The chart looks eerily similar to the TRUMP memecoin that was released in January. After a period of initial upside, TRUMP lost 89% of its value and daily volume dwindled from $39 billion on opening day to just $210 million in the past 24 hours.
• In an attempt to quell the selling pressure, the project revealed on X that WLFI held by the team would not be sold on the open market, stating that every token in the treasury would be subject to governance and not the team’s discretion.
• The tweet failed to stem the decline, and prices continued to tumble shortly after.

Saksham Diwan contributed to this report.