Since Bitcoin fell to $92,458 on December 23, it has quietly rebounded by 6.5%, but has still not broken through the $98,000 barrier. Looking back to December 17 last year, Bitcoin once hit a historic high of $108,275, but then significantly corrected by 14.5%, leaving traders on edge. However, now they seem to have regained their confidence.
The Bitcoin derivatives market maintains a neutral to bullish stance, indicating that price volatility has not shaken market sentiment. This position could provide the potential for Bitcoin's price to continue climbing above $105,000.
Let's take a look at Bitcoin's 2-month futures annualized premium, which is trading 12% higher than the spot market. This indicates strong demand for leveraged long positions! Generally, a premium of 5% to 10% is considered neutral, but this time is clearly different.
Additionally, the 1-month Bitcoin options have a 25% Delta deviation (put options), with put options trading 2% lower than equivalent call options, which aligns with the trend of the past two weeks. If whales and market makers expect a correction, this indicator typically exceeds 6%, but it is clearly not at that level now.
As the S&P 500 index recovers, the revival of traditional financial markets also helps Bitcoin break through $98,000. Meanwhile, the yield on the 10-year U.S. Treasury bond has climbed from 4.23% to 4.59%, indicating that investors are demanding higher returns on government debt.
However, the road for Bitcoin's rise is not smooth. The risk of a global economic stagnation has left investors worried, limiting Bitcoin's upward potential. Currently, Bitcoin's correlation with the S&P 500 index has reached 64%.
The Federal Reserve has also adjusted its interest rate cut expectations, now anticipating only two rate cuts in 2025, down from four previously. This reduces the short-term risks of declining corporate profits and real estate financing issues.
To assess market sentiment, we also need to look at Bitcoin's margin market. Unlike derivative contracts that require both buyers and sellers, the margin market allows traders to borrow money to buy spot Bitcoin or borrow Bitcoin to short.
The long to short margin ratio for Bitcoin on OKX is now 25 times, clearly indicating that the bulls have the upper hand. However, historically, a ratio exceeding 40 times signifies excessive optimism, while below 5 times is usually seen as a bearish signal.
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