Bitcoin Nears All-Time High Amid Bull Run
The price of Bitcoin is on the verge of surpassing its all-time high (ATH) as it continues its upward trajectory. The recent bull run can be attributed to the launch of spot Bitcoin Exchange Traded Funds (ETF), which has attracted institutional investors to the cryptocurrency market.
Currently, Bitcoin (BTC) is trading at around $62,900, with a 3% increase in the last 24 hours. Over the past week, the cryptocurrency has seen a significant 22% gain. It ranks among the top three gainers in the top 10 cryptocurrencies by market cap, trailing behind Solana (25%) and Dogecoin (57%) during the same period.
Bitcoin-Based Derivatives Indicate Potential for Further Growth
Data from the derivatives platform Deribit reveals a surge in long positions by Options operators. These traders have been accumulating call contracts with a strike price above $65,000 since early February.
Initially, this increase in bullish positions was believed to be part of a Bitcoin “Halving” strategy. However, it appears that BTC ETF Flows have played a crucial role in driving the rally.
As Bitcoin reached the $60,000 mark, many traders rushed to accumulate call contracts, leading to a Fear Of Missing Out (FOMO) buying spree that propelled the price to its current levels. The chart below illustrates that FOMO buying intensified when BTC surpassed $57,000.
The surge in trading activity during yesterday’s session resulted in a significant rise in Implied Volatility (IV). Overleveraged positions further contributed to this metric, causing BTC to drop to $59,000 within 15 minutes before bouncing back up as it reached $61,500.
Despite the high IV causing sudden market movements, there hasn’t been much change in the market structure of the derivatives sector. Deribit continues to observe a large number of bullish positions for the coming months, indicating that these traders remain optimistic.
Short-Term Outlook for BTC Price
Although Bitcoin is experiencing a bull run, there is a possibility of a price dip due to market euphoria. Economist Alex Krüeger suggests that the surge in trading volume across the derivatives sector indicates the formation of a “local top.”
Krüeger believes that retail investors have returned to the market driven by FOMO, which often leads to short-term challenges for long traders. He predicts that BTC could see further gains up to $70,000 before dropping to around $55,000.
In his own words:
ATH are inches away. That’s price discovery territory. Thus very easy for things to get even crazier. This is just not where one opens new longs. Too easy to get a quick flush out of nowhere. Ideally we see funding cool down and price consolidate below ATH then break out.
Cover image from Dall-E, Chart from Tradingview
Hot Take: Bitcoin Bulls Eyeing New Heights 🚀
The price of Bitcoin has been soaring as it approaches its all-time high (ATH). The recent surge can be attributed to the launch of spot Bitcoin Exchange Traded Funds (ETF), which has attracted institutional investors to the cryptocurrency market. Bitcoin is currently trading at around $62,900 with a 3% increase in the last 24 hours. It has gained 22% over the past week, making it one of the top three gainers among the top 10 cryptocurrencies by market cap. However, some analysts believe that the market may experience a short-term dip due to FOMO-driven retail investors. Despite this, there is still optimism in the derivatives sector, with traders accumulating bullish positions for the coming months.
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