Author: Marcel Pechman, CoinTelegraph; Translated by: Deng Tong, Jinse Finance.
Bitcoin has risen 6.5% since its low of $92,458 on December 23, but it has failed to break through the resistance level of $98,000. After hitting an all-time high of $108,275 on December 17 last year, the stock market experienced a significant correction of 14.5%, restoring traders' confidence.
Bitcoin derivatives maintain a neutral to bullish stance, indicating that the price's volatility has not significantly affected market sentiment. This position supports the possibility of gold prices continuing to rise above $0.105 million.
Bitcoin 2-month Futures annualized premium. Source: Laevitas.ch.
The trading price of Bitcoin futures monthly contracts is 12% higher than the conventional spot market. This indicates strong demand for leveraged long (Buy) positions. Typically, a premium of 5% to 10% is considered neutral, as sellers take into account the extended settlement period when pricing.
Bitcoin 1-month Options 25% Delta deviation (Put Options). Source: Laevitas.ch.
Compared to equivalent Call (Buy) Options, the trading price of Bitcoin Put (Sell) Options has a 2% discount, consistent with the trend of the past two weeks. This indicator typically exceeds 6% when whales and market makers expect a potential pullback, reflecting the premium of Put options.
As the S&P 500 Index eliminated the monthly decline on December 24, the recent recovery of traditional financial markets also pushed Bitcoin above $98,000. Moreover, the U.S. 10-Year Treasury Notes Yield has risen from 4.23% two weeks ago to 4.59%, indicating that investors are demanding higher returns to Hold government debt.
The recent rise in U.S. Treasury Yields typically reflects expectations of rising inflation or increasing government debt, which would dilute the value of currently held Bonds. In contrast, when central banks are forced to stimulate the economy by injecting liquidity, scarce assets like Stocks and Bitcoin tend to perform well.
Amid economic uncertainty, Bitcoin faces stagnation concerns.
Concerns over the risks of a Global economic stagnation have limited Bitcoin's upward potential. In this context, predicting the comprehensive impact on the stock market and Real Estate Assets is challenging. Currently, Bitcoin is highly correlated with the S&P 500 Index at 64%.
The Federal Reserve has scaled back interest rate cut expectations, currently indicating only two rate cuts in 2025, down from an earlier forecast of four. This adjustment lowers short-term risks of declining corporate profits and potential issues in Real Estate financing.
To assess market sentiment, analyzing Bitcoin's margin market is crucial. Unlike derivative contracts that require buyers and sellers, the margin market allows traders to borrow stablecoins to buy spot Bitcoin or borrow Bitcoin to establish short positions, betting on price declines.
The margin long-to-short ratio of Bitcoin on OKX. Source: OKX.
The Bitcoin long-to-short margin ratio on OKX is currently 25 times, which is favorable for long (Buy) positions. Historically, excessive confidence has pushed this ratio above 40 times, while a level below 5 times is generally considered bearish.
Bitcoin derivatives and margin markets are showing bullish momentum, despite a record outflow of funds from Blackrock's iShares Bitcoin Trust ETF (IBIT) on December 24. Furthermore, the resilience shown when retesting the $92,458 level on December 23 has fueled optimism that Bitcoin could reach $105,000 or higher.