Bitcoin (BTC) Pullback Attributed to Reduction in U.S. Treasury Term Premium and Upcoming Options Expiries

Bitcoin's (BTC) sharp pullback from its record high just under $100,000 has sparked concern among traders

Bitcoin’s (CRYPTO: BTC) sharp pullback from its record high just under $100,000 has sparked concern among traders, Standard Chartered’s Geoffrey Kendrick said in a note to Benzinga on Friday.

Several factors, including a reduction in U.S. Treasury term premium and upcoming options expirations, have contributed to the apex crypto’s correction.

Kendrick highlighted the connection between U.S. Treasury term premium movements and the performance of the crypto market.

Data from the New York Fed, which tracks term premium, shows a recent decline, coinciding with Bitcoin’s recent downturn.

“Being viewed often as a hedge against traditional financial ills, lower term premiums reduce the appeal for Bitcoin in this role,” the analyst said.

Adding to the downward pressure are the substantial monthly options expiries, scheduled for Friday.

According to Deribit data, BTC options with strike prices ranging from $85,000 to $100,000 account for over 18,000 BTC in open interest.

“Historically, options expirations have constrained price movement, with traders positioning themselves around these key levels, creating a magnet effect on spot prices,” Kendrick noted.

He predicts a potential drop below $88,700 — the average purchase price for ETFs and MicroStrategy (NASDAQ:MSTR) since the U.S. elections.

This could lead Bitcoin to test its critical support zone between $85,000 and $88,700 before resuming its uptrend.

Despite the retracement, institutional interest in Bitcoin remains robust.

Kendrick’s analysis showed that ETFs have recorded inflows of approximately 77,000 BTC since the U.S. elections, while MicroStrategy has acquired an additional 134,000 BTC.

However, the analyst noted that the recent institutional buying at an average price of $88,700 could serve as a temporary ceiling until broader market dynamics shift.

Kendrick maintains his year-end target of $125,000 for Bitcoin and a 2025 projection of $200,000.

He views the current retracement as a necessary correction, driven by macroeconomic factors and technical market events.

“We are still in a structural bull market,” Kendrick said. “Once these short-term headwinds subside, Bitcoin is well-positioned to resume its upward trajectory.”