Bitcoin Tops $90,000 as Options Point Toward Shifting Sentiment
TL;DR
Bitcoin surged past $90,000, driven by a rally in risk assets and easing volatility. Options data shows shifting sentiment toward bullish bets, with institutional factors reducing volatility.
Key Takeaways
- •Bitcoin's price rebound above $90,000 is supported by reduced volatility and inflows into ETFs like BlackRock's.
- •Derivatives markets indicate a reversal to bullish sentiment, with increased demand for long positions and call options at $100,000.
- •Institutionalization is reshaping Bitcoin's risk profile, leading to more contained volatility despite recent price declines.
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Bitcoin climbed above $90,000 for the first time in almost a week, clawing back ground after a more than a month-long selloff, as a broad rally in risk assets and easing volatility gave traders room to push higher.
The advance, though modest, put higher levels back in focus, with digital assets moving in step with equities amid growing conviction that the Federal Reserve may soon resume cutting interest rates. BlackRock’s US Bitcoin ETF attracted fresh inflows, snapping a streak of redemptions. Liquidity remains thin ahead of the Thanksgiving break, but with volatility ebbing — and little evidence of fresh forced selling — bulls appear to be testing whether the worst of the drawdown has passed.
“Likely the sharp nature of the move is tied to holiday market. Essentially there’s less liquidity right now, meaning it takes a lot less to move the dial,” said Adam McCarthy, a research analyst at Kaiko.
Despite the retreat of as much as 36% since the record high reached in early October, implied volatility has remained contained, a shift that reflects how the institutionalization of the token is reshaping risk transmission. Early in its history, Bitcoin’s value was primarily driven by speculation from traders seeking to profit from its frequent large price swings.
“This week’s high 80s Bitcoin level has served as consolidation support level — on the back of negative downward trends over the past several weeks,” said Jasper De Maere, desk strategist at Wintermute.
Read more: Bitcoin’s Drawdown Breaks Old Rule as Volatility Stays Tame
A reversal of bearish sentiment is reflected across derivatives markets. Bitcoin perpetual futures, a key market for traders to make leveraged crypto wagers, are seeing more demand for long positions with moderate open interest, according to data from Coinglass. The positive funding rate for such contracts suggests bullish bets has been back in majority after flipping negative earlier this week.
Call options at the strike of $100,000 are seeing the most open interest after downside protection around $80,000 and $85,000 had dominated the market over the last week, according to Coinbase-owned crypto exchange Deribit.
“Over the past couple of weeks speculative long positioning has been significantly reduced as evidenced by the decline in perpetual open interest and funding rates, leaving crypto primed for a move higher,” said Spencer Hallarn, global head of OTC trading at crypto investment firm GSR.
Crypto prices tumbled in early October after Donald Trump roiled financial markets worldwide with a threat to bolster tariffs. The drop has erased more than $1 trillion in digital-asset market value and unleashed a wave of forced liquidations.
Investors appear to testing the market again now. Bitcoin exchange-traded funds saw inflows of about $130 million on Tuesday, according to Bloomberg Intelligence. Investors have pulled nearly $3.6 billion from the 12 US-listed Bitcoin funds in November, the heaviest monthly outflow since the products launched and the first real stress test of the ETF era.