Bitcoin (BTC) has recently shown signs of bullish momentum, breaking out of a tight trading range between $93,000 and $95,600 on May 1st. This upward movement propelled the leading cryptocurrency to a ten-week high of $97,930. The price surge coincided with significant net inflows into US spot Bitcoin exchange-traded funds (ETFs), suggesting growing institutional interest.
However, despite this positive price action, overall market sentiment remains neutral, according to Bitcoin derivatives indicators. A key factor dampening enthusiasm among traders is the escalating global tariff dispute and its potential impact on macroeconomic data. Concerns are mounting that fears of an impending economic recession could limit Bitcoin’s price appreciation, despite increasing institutional adoption. This apprehension has led to a reduced likelihood of BTC reaching the ambitious $110,000 mark or higher in 2025.
Derivatives Data Suggests Cautious Optimism for Bitcoin
An analysis of Bitcoin’s two-month futures contracts reveals an annualized premium hovering between 6% and 7% over the past week. This figure sits comfortably within the neutral range of 5% to 10%. Notably, this premium is lower than the over 10% seen in January when Bitcoin traded near similar levels, indicating a weakening of bullish conviction among traders for substantial gains beyond the $100,000 threshold.
Interestingly, the BTC options market presents a contrasting picture. The 25% delta skew metric, which compares the demand for call (buy) options versus put (sell) options, is currently near its lowest level since mid-February. This suggests that large players, including whales and market makers, are assigning a higher probability to further upside in Bitcoin’s price. This marks a significant shift from three weeks prior when put options were trading at a premium.
US-China Trade War Remains Key Determinant for Bitcoin’s Price
While Bitcoin has recently surpassed silver to become the seventh-largest global tradable asset, the remarkable 20% rally in gold, reaching a staggering $21.7 trillion market capitalization, has captured the attention of some investors. Concerns linger that Bitcoin’s established correlation with the stock market may be undermining its “digital gold” narrative as a safe-haven asset, especially when traditional safe havens like gold are exhibiting stronger performance.
Furthermore, the substantial $3.6 billion in net inflows into US spot Bitcoin ETFs over the past two weeks might not translate directly to significant price appreciation. There is a possibility that these flows are driven by delta-neutral strategies, where investors hedge their positions using derivatives or simply move existing Bitcoin holdings into these listed products.
Looking ahead, the ongoing commercial tensions between the United States and China are expected to remain a critical factor influencing Bitcoin’s price trajectory. As long as this trade dispute persists, Bitcoin is likely to continue mirroring the movements of the S&P 500. While this environment might hinder Bitcoin from reaching a new all-time high in the short term, current indications from BTC derivatives suggest a slight lean towards bullish sentiment among professional traders, hinting at potential for further gains despite the macroeconomic headwinds.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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