Bitcoin’s recent surge to over $112,000 has left many investors wondering if the rally will stick. Despite the impressive price increase, BTC derivative metrics suggest that traders are still cautious. To understand what’s driving this skepticism, it’s essential to examine the current state of Bitcoin options and futures financing rates.
Bitcoin Options and Futures Financing Rates
The Bitcoin options Delta Skew is currently at 9%, indicating a slight preference for put options over call options. This suggests that traders are risk-averse, although it may simply reflect the trading conditions of the past week rather than a clear anticipation of a strong decline. The options premium put-to-call ratio has also jumped, indicating a greater appetite for neutral to bearish strategies.
The demand for put options increased on Monday, reversing the trend of the two previous sessions. This data indicates that retailers are cautious before a potential decline to $108,000. Part of this lack of enthusiasm stems from Bitcoin’s inability to reflect the fresh all-time highs in both the S&P 500 and gold. The expectations of monetary relaxation increased after weaker-than-expected labor market numbers in the United States.
Spot Bitcoin ETFs and Company Reserves
Spot Bitcoin ETFs recorded $383 million in net outflows between Thursday and Friday. These withdrawals are likely unsettling, although Bitcoin successfully held the support level of $110,000. The competition from Ether as a company reserve value can also influence the mood, as companies have provided an additional $200 million in the past week alone, according to Strategicethreserve data.
Dealers now assign a probability of 73% that interest rates will be 3.50% or lower, according to the CME Fedwatch Tool, compared to 41% a month ago. To determine whether the bearish mood is limited to BTC options, it’s essential to look at the Bitcoin Futures market. Under normal conditions, the financing rates for perpetual contracts are usually between 6% and 12% to explain the costs for capital and stock exchange risks.
The perpetual futures financing rate of Bitcoin is currently at 11%, which is neutral and an improvement compared to the bearish 4% observed on Sunday. Traders may react to increased competition through old coins, especially after the Nasdaq was submitted to the US Securities and Exchange Commission to list tokenized stock and stock market funds (ETFs).
Krypto-TFs Protocol and Ether Funds
Bitcoin derivatives continue to reflect skepticism compared to the latest rally, as both options and futures show little enthusiasm for the move over $112,000. What could push traders out of this cautious attitude remains uncertain. The disappointment that strategy (MSTR) was excluded from the S&P 500 compensation on Friday could also explain some of the steamed mood among bulls.
At the moment, an increase to $120,000 is unlikely. However, if it’s about stabilizing Spot Bitcoin ETFs, the general mood could improve quickly and set the stage for a new price dynamics. For more information on the current state of Bitcoin and its potential future movements, visit https://cointelegraph.com/news/bitcoin-tackles-dollar112k-but-will-the-rally-stick?utm_source=rss_feed&utm_medium=rss_category_market-analysis&utm_campaign=rss_partner_inbound
