Bitcoin trades down as caution descends ahead of US jobs report

The world's largest cryptocurrency by market capitalization declined on Thursday as traders looked with caution toward Friday's U.S. jobs report. The Dow Jones Industrial Average rose 0.1%, while the SP 500 crept up only 0.8%.

The monthly U.S. jobs report will give further signals on whether current monetary policy is tackling inflation. It could also provide some interest rate expectations before the Federal Reserve's last meeting of the year on Dec. 13.

Bitcoin BTC -1.80% , which tends to correlate with major equity indices, was down 1.2% at 1:22 p.m. ET, changing hands for $43,383.

Open interest still indicates bullish expectations

Despite two days of modest declines, open interest in bitcoin options on the Deribit derivatives exchange shows a large number of calls outstanding for the $75,000 strike price for the end of January expiry date. Traders purchasing the right to buy bitcoin at that level suggest they could be expecting the market price to keep rising.

Deribit Chief Commercial Officer Luuk Strijers said the open contracts could have been sold as part of a $50,000 to $75,000 January call spread. "This means that the traders may be expecting the market to expire anywhere between those strikes," Strijers told The Block.

According to Deribit data, the derivatives exchange now has 3,684 bitcoin option calls outstanding for the $75,000 strike price, which have a notional value of around $162 million. This group of calls still outstanding is second only to those for the $50,000 strike price.

Bitcoin options open interest shows a substantial proportion at the $75,000 call strike price.

The aggregated open interest of bitcoin options across all major centralized crypto derivatives exchanges has reached an all-time high of $17.3 billion, according to The Block's Data Dashboard.

An increase in open interest suggests that new money is entering the market, indicating growing participation and potential liquidity. 

In reference to the recent rally in the bitcoin market, Strijers said he attributes the surge to a confluence of factors including widespread optimism in anticipation of a possible decision from Securities and Exchange Commission about a spot bitcoin ETF, easing concerns following the settlement of Binance's legal matters, escalating geopolitical tensions, easing of inflation and the steady increase in institutional engagement.