Bitcoin’s recent price action has left many traders questioning the sustainability of its current support level. Despite a strong rally in the stock market, fueled by impressive U.S. economic growth and jobs data, Bitcoin has struggled to find bullish momentum, hovering below $91,000 since Tuesday. This muted demand for leveraged long positions has led to concerns about whether the $88,000 support level can hold for an extended period.
Source: laevitas.ch
The annual funding rate for Bitcoin perpetual futures was 7% as of Thursday, indicating a rebound from Monday’s low but still falling short of the typical neutral range of 6% to 12%. This suggests that there is still significant demand for bullish leverage missing from the market, contributing to the cautious sentiment among traders.
Market Sentiment and Bitcoin Whales
The lack of optimism among Bitcoin traders can be attributed to the robust U.S. GDP growth of 4.4% in the third quarter, which generally drives earnings momentum and provides a tailwind for the stock market. Additionally, continuing jobless claims fell by 26,000 to 1.85 million in the week ended January 10, further solidifying the economic outlook. However, despite this cautious belief, there has been no significant increase in demand for downside protection via BTC options, indicating a neutral to bullish stance among professional traders.
Source: laevitas.ch
Options Strategies and Market Expectations
According to data from Laevitas, the two most active BTC options strategies on Wednesday and Thursday were the Long Straddle and the Long Iron Condor, both of which prioritize volatility over directional bets. This suggests that whales and market makers are expecting a period of price appreciation rather than a deeper correction from the current level of $89,500. To further understand the sentiment of professional traders, analyzing the long-short ratios of the stock markets provides a broader view than a single contract by aggregating positions across futures, perpetual, and margin markets.
Source: CoinGlass
Top traders on Binance increased their bullish commitment on Thursday, with the long-to-short ratio rising from 2.08 to 2.18. Similarly, 20% of OKX users increased their long positions on Thursday, despite Bitcoin failing to reclaim $90,000. This on-chain data reinforces the view that traders remain neutral to bullish despite the current lack of interest in high-leverage games. As the market’s attention shifts to corporate profits, with several major companies reporting next week, including Microsoft, Tesla, Apple, and Visa, consumer demand will also be under scrutiny with reports from General Motors and Starbucks.
Economic Indicators and Market Divergence
Gold prices hit an all-time high on Thursday as 10-year U.S. Treasury yields neared 20-week highs, signaling a divergence that typically indicates waning confidence in the U.S. fiscal position. Investors are clearly concerned that further stimulus could trigger inflation given the growing U.S. deficit. The 10-year yield reached 4.25% on Thursday, up from 4.14% the previous week, indicating lower buyer demand and higher borrowing costs for the government.
Source: Tradingview
Ultimately, Bitcoin derivatives are showing resilience after retesting $88,000, with little sign of bearish sentiment. However, a return towards $95,000 relies heavily on institutional inflows, which have yet to materialize following net outflows of $1.58 billion from Bitcoin spot ETFs over the past two days. For more detailed analysis and market insights, visit Cointelegraph.
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