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Bitcoin struggles below $98K but derivatives show confidence

Bitcoin struggles below $98K but derivatives show confidence

Grafa2024/12/03 06:40
By: Isaac Francis
BTC-0.15%

Bitcoin (CRYPTO:BTC) has faced difficulty in breaking the $98,000 level from November 25 to December 2, despite a 38% gain over the past month.

Investors have expressed concerns that continued consolidation below the $100,000 mark could encourage bearish strategies to push prices lower.

However, Bitcoin's derivatives markets paint a different picture, signaling resilience.

Traders are still paying a 17% annualised premium on leveraged Bitcoin positions, reflecting solid bullish demand.

This premium, though lower than the 40% levels observed during major bull runs, suggests healthy market confidence without excessive optimism.

Derivatives data shows that Bitcoin’s price stability is not solely driven by institutional purchases, as spot Bitcoin exchange-traded funds (ETFs) also show strong performance.

MicroStrategy added 15,400 BTC between November 25 and December 1, spending $1.5 billion at an average price of $95,976.

This increased the company’s holdings to 402,100 BTC, now worth $38.4 billion.

Similarly, Marathon Digital acquired 6,484 BTC in a span of two months, investing over $600 million.

Despite these institutional purchases, Bitcoin was already trading above $90,000 before the inflows from spot ETFs, highlighting sustained demand from a broader market.

The Bitcoin options market also reflects optimism, with put options trading at an 8% discount to call options, signaling less concern about price drops.

Retail traders also play a key role in market movements.

The funding rate for Bitcoin perpetual futures remains within a neutral range of 1.4%, which suggests balanced market sentiment.

While Bitcoin has struggled to surpass $98,000, the strength of the derivatives market shows continued confidence from both institutional and retail participants in its long-term potential.

At the time of reporting, the Bitcoin (BTC) price was $95,688.74.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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