Bitcoin has surged 6.5% since hitting a low of $92,458 on December 23, but has been unable to break above the $98,000 resistance level. However, traders are clearly showing confidence, following a 14.5% retracement that followed Bitcoin’s all-time high of $108,275 on December 17.
Bitcoin derivatives maintain a neutral to bullish stance, indicating that violent price fluctuations have not significantly impacted market sentiment. This supports the possibility of a sustained Bitcoin price rally above $105,000.
Bitcoin futures monthly contracts are now trading at a premium of about 12% to the general spot market. This shows strong demand for leveraged long positions. Generally speaking, a premium of 5% to 10% is considered neutral because the seller factors in the extended settlement period when setting the price.
Bitcoin put options are at a 2% discount to regular call options, in line with the trend over the past two weeks. This indicator typically trades at a 6% premium, reflecting the put premium, when whales and market makers anticipate a possible pullback.
The traditional financial market has recently recovered. The S&P 500 Index of the US stock market recovered this month's losses on the 24th, which also drove the Bitcoin market back to above US$98,000, while the 10-year US Treasury bond yield rose to 4.59%, higher than two It was up from 4.23% a week ago, showing that investors are demanding higher returns when holding U.S. Treasuries.
Recent increases in U.S. Treasury yields generally reflect market expectations of rising inflation or rising government debt, which will 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 generally perform well.
Bitcoin faces stagnation fears amid economic uncertainty
However, Bitcoin's upside remains limited as investors worry about the risk of a global economic stagnation. In this case, it is difficult to predict the full impact on stock markets and real estate assets. Currently, Bitcoin’s correlation with the S&P 500 is relatively high at 64%.
The U.S. Federal Reserve has scaled back its forecasts for rate cuts and now says it will cut rates only twice in 2025, down from four previously expected. Such adjustments reduce short-term risks of declining corporate profits and potential problems with real estate financing.
In order to assess market sentiment, analyzing Bitcoin’s margin market is necessary. Unlike derivative contracts, the margin market allows traders to borrow stablecoins, buy spot Bitcoin, or borrow Bitcoin to establish a short position, thereby betting that the price will fall.
OKX’s Bitcoin long-short margin ratio is currently 25x, which favors long positions. Historically, excessive confidence has led to ratios above 40x, while levels below 5x are generally considered bearish.
Both Bitcoin derivatives and margin markets are showing bullish momentum, despite record outflows from BlackRock’s iShares Bitcoin Trust ETF (IBIT) on December 24. Furthermore, as Bitcoin once retested the $92,458 level on the 23rd, but now rebounded, showing resilience, strengthening the market's optimism that Bitcoin is expected to rise above $105,000.
Analyst Predictions: Ethereum to challenge $4,000, Bitcoin could move higher above $105,000
Analysts expressed optimism about the future price movements of Ethereum (ETH) and Bitcoin, citing factors including increased institutional interest, growth in the decentralized finance (DeFi) sector, the expected impact of Ethereum 2.0, and broader market adoption .
The price of Ethereum is expected to experience significant growth. Forecasts indicate that once ETH breaks through the psychological barrier of $3,500, it may gain further upward momentum and challenge the $4,000 level within the year. For long-term investors, an upward trajectory for Ethereum’s price, supported by market fundamentals, could lead to significant returns as it approaches $5,000 in the first quarter of 2025.
According to OKX data, Bitcoin climbed back to a high of $99,865 on the 26th, an increase of 8% from the low on the 23rd. The surge follows a previous decline of 14.5% from an all-time high of $108,275 set on Dec. 17. Market sentiment is neutral to positive, with traders anticipating that Bitcoin could move higher above $105,000. Bitcoin derivatives data are neutral to bullish, indicating that the violent price swings have not had a major impact on market sentiment.
Data source: OKX
Current market dynamics suggest a cautious but hopeful outlook for both Bitcoin and Ethereum. Traders and analysts are positioning themselves for potential gains in the cryptocurrency market. Although challenges and uncertainties remain in the cryptocurrency market, overall sentiment remains positive.
"Bitcoin bulls are back! Derivatives data suggests a rebound to $105,000." This article was first published on (Block Guest).
