Bitcoin hovers near $97K, but derivatives data shows traders remain cautious

Bitcoin (BTC) price surged to $97,838 on May 3, marking its highest level in 10 weeks

Bitcoin (BTC) price rose to $97,838 on May 3, reaching its highest level in the past 10 weeks as strong institutional demand pushed up U.S.-listed spot Bitcoin ETFs by over $3.6 billion. At the time of writing, Bitcoin is trading at $96,362, showing a slight increase despite heightened macroeconomic uncertainties.

However, derivatives market data from Laevitas indicates that futures traders are showing some hesitation in taking on leveraged bullish positions. Analysts suggest that concerns over global trade tensions and a possible economic downturn are preventing traders from fully anticipating a breakout toward the psychological $100,000 mark.

Image: Bitcoin price 1W chart (CoinGecko)

U.S. spot Bitcoin ETFs saw record net inflows of over $3.6 billion in the past two weeks, highlighting strong institutional interest in the crypto market. However, considering the modest 5% price increase during the same period, it appears that a portion of this activity is driven by delta-neutral strategies.

Essentially, this means that institutions are moving their existing Bitcoin holdings into listed products or hedging through derivatives rather than making fresh, outright bullish bets on Bitcoin.

While the substantial institutional activity supports the long-term fundamentals of Bitcoin, its short-term impact on price appears to be limited. The lackluster reaction to Biden's executive order and the modest BTC rally despite record ETF inflows suggest that ETF demand alone might not be sufficient to propel Bitcoin to new all-time highs.

Two-month futures annualized premium remains in the neutral zone at 6–7% according to Laevitas, suggesting that traders are not overly leveraged. Premiums above 10%, observed in January when BTC was also trading near $95,000, usually indicate strong directional conviction among futures traders.

However, options markets present a more bullish narrative. The 25% delta skew, a measure of the difference in demand between calls and puts, is at its lowest level since mid-February, indicating that whales and market makers are increasingly pricing in higher odds of upside movement in the coming weeks.

Bitcoin outperformed silver recently, rising to the seventh-largest tradable asset globally with a market cap of over $2.1 trillion. However, its performance is lagging behind gold's explosive 20% rally this year, which pushed its valuation past $21.7 trillion.

This divergence has sparked discussion around Bitcoin's "digital gold" narrative, especially considering Bitcoin's increasing correlation with traditional risk assets like equities. Many investors now view Bitcoin's price path as closely tied to macroeconomic developments.

Signals such as the U.S.–China trade conflict and the recent negative U.S. GDP print are having a greater impact on market sentiment than BTC's own blockchain activity.

Derivatives and ETF data suggest that Bitcoin could continue its upward momentum in the short term as traders remain cautiously optimistic. The lack of leverage usage and restrained futures premiums highlight a market that is optimistic but not euphoric.

If Bitcoin manages to hold above the $96,000 level with continued ETF inflows and no major macro shocks, then a slow grind toward $100K over the next few months seems plausible. However, any escalation in trade disputes or signs of stagflation could limit Bitcoin's gains and keep it trading in a range.

Bitcoin may have the momentum to challenge $100K, but traders are hedging their bets. Without a clear macroeconomic green light or a surge in interest from retail traders, it remains to be seen what could drive BTC's next big move.