Bulls are back: BTC derivatives data hints at a rise to $105K

Author: Marcel Pechman, CoinTelegraph; Compiled by: Deng Tong, Golden Finance

Bitcoin has risen 6.5% since the low of $92,458 on December 23, but failed to break through the resistance of $98,000 Bit. After hitting an all-time high of $108,275 on December 17 last year, the stock market pulled back sharply by 14.5% as traders regained confidence.

Bitcoin derivatives maintain a neutral to bullish stance, indicating that violent price fluctuations have not significantly affected market sentiment . This position supports the possibility that gold prices will continue to rise above $105,000.

Bitcoin 2-month futures annualized premium. Source: Laevitas.ch

Bitcoin futures monthly contracts trade at a higher price than the regular spot market 12% higher. This indicates strong demand for leveraged long (buy) positions. Typically, a premium of 5% to 10% is considered neutral as the seller factors in the extended settlement period when pricing.

Bitcoin 1-month options 25% delta bias (put options). Source: Laevitas.ch

Bitcoin put (sell) options are trading at a 2% discount compared to equivalent call (buy) options over the past two weeks. The trend is consistent. When whales and market makers anticipate a possible pullback, this indicator typically exceeds 6%, reflecting put premium.

A recent recovery in traditional financial markets also pushed Bitcoin above $98,000, as the S&P 500 erased its monthly losses on December 24. In addition, the yield on the 10-year U.S. Treasury note climbed to 4.59% from 4.23% two weeks ago, indicating that investors are demanding higher returns from holding government debt.

Recent increases in U.S. Treasury yields typically reflect expectations of higher inflation or higher government debt, which can dilute the value of current bond holdings. In contrast, when central banks are forced to stimulate the economy by injecting liquidity, scarce assets such as stocks and Bitcoin tend to perform well.

Bitcoin faces stagnation concerns amid economic uncertainty

Bitcoin’s upside remains limited as investors worry about the risk of global economic stagnation. In this case, predicting the full impact on stock markets and real estate assets is challenging. Currently, Bitcoin’s correlation with the S&P 500 is relatively high at 64%.

The Fed has scaled back its expectations for rate cuts and now says it will cut rates just twice in 2025, compared with four previously expected. This adjustment reduces the short-term risk of declining corporate profits and potential problems with real estate financing.

In order to assess market sentiment, it is crucial to analyze Bitcoin’s margin market. Unlike derivatives contracts, which require buyers and sellers, margin markets allow traders to borrow stablecoins to buy spot Bitcoin or borrow Bitcoin to establish short positions, betting that the price will fall.

OKX’s Bitcoin margin long-short ratio. Source: OKX

OKX’s Bitcoin long to short margin ratio is currently 25 times, with Good for long (buy) positions. Historically, excessive confidence has pushed this ratio above 40x, while levels below 5x are generally considered bearish.

Both the Bitcoin derivatives and margin markets are showing bullish momentum, despite a record-breaking decline in BlackRock’s iShares Bitcoin Trust ETF (IBIT) on December 24 Outflow of funds. Furthermore, the resilience shown in the retest of $92,458 levels on December 23 has bolstered optimism that Bitcoin has the potential to reach $105,000 and beyond.