Bitcoin’s recent price correction has sparked concerns among traders, but a closer look at the cryptocurrency’s derivatives and institutional flows suggests that the bullish momentum is still intact. Despite a 4.2% correction on Tuesday, Bitcoin’s price remains strong, with a 12.5% weekly gain and a new all-time high of $126,219. The correction was somewhat expected, given the uncertainty in global economic outlooks, but the data points to further upside.
Bitcoin Derivatives Data
Bitcoin monthly futures are trading at an 8% annualized premium compared to regular spot markets, which is within the neutral 5% to 10% range. This suggests that derivative traders are not overly confident, which reduces the risk of cascading liquidations if Bitcoin’s price dips further. The premium is calculated using data from laevitas.ch, which provides insights into Bitcoin’s futures market. As seen in the image below, the two-month futures annualized premium is a key indicator of market sentiment.
Source: laevitas.ch
Institutional Adoption and Corporate Reserves
Institutional adoption continues to favor Bitcoin, with net flows into listed Bitcoin products remaining a reliable gauge of institutional interest. The $3.55 billion in weekly net inflows into Bitcoin exchange-traded products, including ETFs, has pushed total assets under management to $195.2 billion. This is a clear sign of growing institutional adoption, with Bitcoin investment companies like Strategy and Metaplanet buying BTC as a reserve asset. The image below shows the weekly ETF/ETP net flows by asset, in USD million, sourced from CoinShares.
Source: CoinShares
Bitcoin Exchange Reserves and Futures Open Interest
Bitcoin deposits on exchanges have dropped to their lowest levels in over five years, signaling a reduced supply available for immediate sale. According to Glassnode, total exchange balances are estimated at 2.38 million BTC, down from 2.99 million one month earlier. The image below shows the Bitcoin balance on exchanges, in BTC, sourced from Glassnode.
Source: Glassnode
Bitcoin futures open interest across major exchanges currently stands at $72 billion, down 2% from Monday but still at a robust level. A deep and liquid derivatives market is crucial for attracting flows from global hedge funds and asset allocators, even when that includes demand for short positions. The image below shows the Bitcoin futures aggregate open interest, in USD, sourced from CoinGlass.
Source: CoinGlass
While a short-term consolidation remains possible, the strength of Bitcoin’s derivatives market and ongoing institutional adoption support further upside, with bulls targeting $150,000 or more by year-end. For more information, visit the original source: https://cointelegraph.com/news/bitcoin-sells-off-but-btc-derivatives-data-points-to-150k-by-year-s-end
