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Cryptocurrency News Articles
Bitcoin Price Momentum and Options Sentiment Fuel Hopes for $100K Threshold
May 07, 2024 at 11:35 pm
Bitcoin's recent price increase has boosted options traders' optimism about the likelihood of it reaching $100,000 this year. Despite outflows in Bitcoin ETFs and overall cryptocurrency investment products, Ethereum inflows and positive sentiment in OTC networks suggest a bullish outlook.
Bitcoin Price Momentum and Options Market Sentiment Rekindle Expectations of $100,000 Threshold
The recent surge in Bitcoin (BTC) price has reignited discussions among options traders, prompting them to reconsider the possibility of the cryptocurrency reaching the highly anticipated $100,000 mark before the end of the year.
Outflows Dampen Cryptocurrency Investment Products
According to the latest report from CoinShares, cryptocurrency investment products have endured a fourth consecutive week of outflows totaling $251 million. The predominant contributor to this outflow was spot Bitcoin ETFs, which experienced redemptions amounting to $156 million.
CoinShares estimates that the average purchase price of these ETFs since their inception has hovered around $62,200 per Bitcoin. With the price dropping below this level by 10%, it is possible that automatic sell orders were triggered, leading to the outflows. However, Bitcoin ETF flows have exhibited a positive reversal in the last two trading sessions, suggesting renewed interest. Notably, Grayscale's GBTC has registered net inflows for two consecutive days.
Bitcoin Dominates Outflows, While Other Digital Assets Gain Traction
An analysis of net flows across digital assets reveals that Bitcoin was the sole asset to witness outflows, totaling $284 million. In contrast, Ethereum (ETH) broke its seven-week streak of outflows, recording $30 million in inflows last week.
Altcoins also experienced positive inflows, with Avalanche, Cardano, and Polkadot receiving $0.5 million, $0.4 million, and $0.3 million, respectively. A notable bright spot, as highlighted by CoinShares, was the launch of the Hong Kong Bitcoin and Ethereum ETFs, which attracted over $307 million in net inflows during their first week.
Bitcoin Price Analysis: Recovery and Bullish Outlook
After briefly dipping to $57,000 last week, Bitcoin price has rebounded, buoyed by better-than-expected jobless data. This has fueled expectations that the Federal Reserve may announce interest rate cuts sooner than anticipated, which would inject greater liquidity into the market, benefiting risk-on assets like stocks and cryptocurrencies.
At the time of writing, Bitcoin trades around $63,360 levels, with a market capitalization of $1.245 trillion. Crypto analyst Michael van de Poppe anticipates a continuation within the current range and emphasizes the significance of the $60,500 level. Should this level hold, he believes there is a strong possibility of a further advance towards $70,000 in the next one to two months.
Options Market Signals Bullish Sentiment
The recent positive price momentum has influenced options traders to reassess the likelihood of Bitcoin reaching the $100,000 mark this year. Subsequently, there has been a noticeable surge in the demand for Bitcoin call options on leading cryptocurrency exchange Deribit and over-the-counter (OTC) networks. These options speculate on a surge to new highs, potentially surpassing $75,000 and even reaching $100,000.
QCP Capital, a cryptocurrency investment firm, observed in a note to investors on Monday, "We are seeing some bullish follow-through in volatility and rates following the reversal bounce from Friday and into the weekend. BTC risk reversals have gone positive (calls more expensive than puts), and [there has been a] renewed demand for BTC Sep expiry $75,000 and $100,000 call."
This heightened optimism in the options market underscores the growing belief among traders that Bitcoin is poised for further gains in the coming months. While the $100,000 target remains a speculative aspiration, the recent price action and bullish sentiment suggest that it is not entirely out of reach.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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