The crypto market faces a double test: the expiration of options and the collision with PCE data, with $108,000 becoming the line between life and death.

This week, the cryptocurrency market is facing a crucial test: the quarterly options expiration coinciding with the release of important U.S. inflation data (core PCE). This dual collision will determine whether the recent rise continues to soar or collapses here. By the end of the third quarter this Friday, approximately $22.3 billion in cryptocurrency options will expire, with the notional value of Bitcoin (BTC) options being $17.06 billion, marking the "largest Bitcoin expiration cycle in history." Derivatives experts warn that $108,000 is a key support level for Bitcoin, and if it falls below this level, it could trigger a chain reaction of sell-offs, pushing the price down to $96,000.

###$17 Billion Options Expiration: Short Gamma Risk and the $108,000 Key Level

This week's options expiration is massive, and the positions of derivative traders behind it are crucial for the short-term price movement of Bitcoin.

####Downward risk brought by Short Gamma

· Maximum expiration size: This BTC Options notional value reaches 17.06 billion USD, referred to by analysts as the "largest in history."

· Dealer position: Greg Magadini, the derivation director of the options analysis platform Amberdata, pointed out that there is a large amount of "Short Gamma" positions at $109,000 and $108,000.

· Forced selling: Short Gamma means that options dealers and large institutions will be forced to sell to hedge when prices fall, which may amplify the market's fall.

####108,000 USD death line

· Key Support: Magadini emphasizes that $108,000 is a critical level for Bitcoin traders. If this support cannot be maintained, it could trigger an automated selling cascade, occurring independently of inflation data.

· Potential Crash: Considering the traders' Short Gamma positions and approximately 35% volatility, Magadini expects that a drop below $108,000 will trigger "two standard deviations of volatility," potentially pushing the BTC price down to $96,000, especially in a weak market sentiment.

###Core PCE Data: Catalyst or Suppressing Force?

Today at 8:30 AM Eastern Time (8:30 PM Beijing Time), the United States will release the core PCE (Personal Consumption Expenditure Price Index), which is crucial for the Federal Reserve's policy path.

· Data expectations: The core PCE (the inflation indicator preferred by the Federal Reserve) is currently hovering around 3%, with the market predicting a month-on-month rise of about 0.2%, slightly lower than last month's 0.3%.

· Bearish scenario: If the data is hotter-than-expected, it may strengthen the recent rebound of the dollar and exacerbate the current pullback of Bitcoin.

· Positive scenario: If the core PCE data softens, Maja Vujinovic, CEO of Nasdaq-listed FG Nexus, believes this could create a "pin from options expiry," thereby easing pressure and allowing prices to rise sharply.

###Market Sentiment and Long-Term Outlook

Despite facing pressure in the short term, many analysts remain optimistic about the long-term prospects of crypto assets.

· Short-term risk: Magadini agrees that there are downward risks in the short term, primarily driven by the uncertainty of Federal Reserve policies and the weakness of risk assets. Currently, Bitcoin is trading at $109,100, down 3.8% on Thursday, and has fallen a total of 6.50% over the past week.

· Long-term bullish: Both Vujinovic and Magadini expect the market to become constructive in the fourth quarter. Vujinovic is optimistic about the demand and liquidity improvements brought by spot ETFs.

· Extreme target: Magadini expects the long-term price of ETH to "rise significantly," stating that "if the Fed stops fighting inflation, I can easily see Bitcoin starting to trade above $250,000."

· Options data support: The bullish sentiment is also reflected in the options data, with a large number of investors buying call options with strike prices of 120,000 dollars and 140,000 dollars for the end of the year.

###Conclusion

With the expiration of quarterly options and the release of core PCE data, Bitcoin is facing a decisive moment this week. The Short Gamma structure in the derivatives market makes $108,000 a key psychological and technical barrier. If this support level is breached, it could trigger a rapid automatic sell-off, causing prices to quickly approach $96,000. Conversely, if inflation data softens, combined with its massive expiration size, it could reverse the current bearish momentum. Although the market is experiencing extreme volatility in the short term, the long-term bias in the options market still shows that investors maintain an extremely optimistic outlook on the future of BTC. Do you think today's PCE data will be the decisive factor to break the deadlock?

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The crypto market is highly volatile, and investors should make decisions cautiously.