Bitcoin Bulls Return: Derivatives Signal Potential Rally Beyond $105K Despite Economic Worries

Bitcoin neutral-to-bullish derivatives data suggests a potential rally above $105,000 as it rebounds from $92,458. Despite economic uncertainty, market sentiment remains strong, hinting at sustained upward momentum.

Bitcoin has shown signs of renewed bullish momentum after gaining 6.5% since its December 23 low of $92,458. Despite failing to break the $98,000 resistance level, confidence among traders remains high following the 14.5% correction from the $108,275 all-time high recorded on December 17.

Bitcoin Derivatives Indicate Bullish Sentiment

Bitcoin derivatives data highlights a neutral-to-bullish market stance, underscoring optimism about the cryptocurrency’s potential rally above $105,000. Futures monthly contracts are trading at a robust 12% premium over spot market prices, signaling strong demand for leveraged long positions. Typically, a premium of 5% to 10% is considered neutral, making the current figure a clear indicator of bullish sentiment.

Similarly, Bitcoin put (sell) options are trading at a 2% discount compared to call (buy) options, reflecting subdued concerns over a potential correction. Historically, a put option premium exceeding 6% signals bearish sentiment, which is absent from the current market setup.

Macro Factors Boost Bitcoin Confidence

Traditional financial markets have also contributed to Bitcoin’s upward trajectory. On December 24, the S&P 500 index erased its monthly losses, and the US 10-year Treasury yield climbed to 4.59%, up from 4.23% earlier in the month. Rising yields often signal higher inflation expectations, making scarce assets like Bitcoin and stocks more attractive as central banks inject liquidity into the economy.

Challenges Ahead: Economic Uncertainty and Rate Adjustments

Despite this momentum, Bitcoin’s upside potential faces challenges from global economic stagnation fears and a high 64% correlation with the S&P 500 index. Investors remain cautious as the US Federal Reserve scaled back its interest rate-cut projections for 2025 from four to two, reducing the risk of corporate earnings declines and real estate financing issues.

Bitcoin’s margin markets also reveal sustained bullish sentiment. The long-to-short margin ratio at OKX is currently at 25x in favor of longs, well below the excessive confidence levels seen at 40x, yet still strongly bullish compared to bearish levels below 5x.

Optimism Persists Despite ETF Outflows

Although BlackRock’s iShares Bitcoin Trust ETF (IBIT) experienced record outflows on December 24, Bitcoin’s resilience during its retest of $92,458 on December 23 bolsters confidence. The current market conditions suggest Bitcoin could surpass the $105,000 milestone and continue its upward trajectory in the near term.

Our creator. creates amazing NFT collections! 
Support the editors - Bitcoin_Man (ETH) / Bitcoin_Man (TON)

Pi Network (Guide)is a new digital currency developed by Stanford PhDs with over 55 million participants worldwide. To get your Pi, follow this link https://minepi.com/Tsybko and use my username (Tsybko) as the invite code.

Binance: Use this link to sign up and get $100 free and 10% off your first months Binance Futures fees (Terms and Conditions).

Bitget: Use this link Use the Rewards Center and win up to 5027 USDT!(Review)

Bybit: Use this link (all possible discounts on commissions and bonuses up to $30,030 included) If you register through the application, then at the time of registration simply enter in the reference: WB8XZ4 - (manual)