On Monday, February 12, the price of bitcoin broke the $50,000 barrier on several exchanges, with Binance reporting a high of $49,990. This notable rally can be attributed to three critical factors: the influx of spot bitcoin ETF inflows, bullish signals from the options market, and supporting trends in the futures market.
#1 bitcoin ETF Spot Inflows
bitcoin's notable price rise above $50,000 has been significantly influenced by rising bitcoin ETF spot inflows, a trend marked by growing institutional demand. Grayscale outflows continue to slow, while ETF inflows to BlackRock, Fidelity and others remain massive.
According to Arkham, on February 12 at 22:14 UTC+8, 2,044 btc were transferred from Grayscale to Coinbase Prime Deposit, which corresponds to a value of approximately $98 million and once again confirms the easing of Grayscale's selling pressure. Meanwhile, Coinbase Premium is once again in a clear uptrend, pointing to new high inflows into ETFs.
Bernstein analysts Gautam Chhugani and Mahika Sapra have highlighted this change, noting that “bitcoin ETFs have emerged as clear price catalysts. The decline in outflows from Grayscale bitcoin Trust to around $50 million, along with nearly $1 billion in inflows into new ETFs over two days, has noticeably improved market sentiment.” This shift means broader acceptance of btc among institutional investors, facilitated by the convenience of ETFs for adding bitcoin to traditional investment portfolios.
Furthermore, Bernstein's comment suggests that while the market reacted quickly to the ETF approvals, the full impact of these inflows and the resulting bitcoin shortage has yet to be fully realized. “We are witnessing an ETF-driven bitcoin FOMO rally, setting the stage for potential all-time highs,” say Chhugani and Sapra. This analysis points to a major turning point in bitcoin investing, with ETFs playing a pivotal role in shaping its price trajectory and highlighting growing optimism about btc's future performance.
#2 options market
The options market has been a clear indicator of bullish sentiment, and investors are positioning for higher prices. Kelly Greer of Galaxy Digital noted a significant trend in the market and stated: “It's happening again, bullish options positions are built around a strike, in November it was 40,000, now it's 50,000. From April to June, between 50,000 and 75,000 calls have been printed, 2,000 btc were traded in the last 2 hours.”
This observation highlights growing confidence among investors, who are betting on the price of btc to reach between $50,000 and $75,000 in the coming months.
It's happening again
Bullish options positions are built around a strike, in November it was 40,000, now it is 50,000.
From April to June, between 50,000 and 75,000 calls were printed, 2,000 btc?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#btc traded in the last 2 hours
options markets in increasing numbers mode https://t.co/sflG9xxPBf pic.twitter.com/acsVOmgn0U
—Kelly Greer (@kellyjgreer) February 12, 2024
#3 Futures market
The futures market has provided further evidence of bullish momentum, with a notable increase in open interest and positive changes in premiums. crypto analyst Furkan Yildirim noted: “bitcoin is approaching $50,000 with the tailwind from the futures markets. The premium has fallen into positive territory and open interest is at its highest level since December 2021.”
Yildirim also highlights the current market dynamics: “Momentum remains positive and more (short) liquidations could take place above $51,000.” However, he warns that a countermove to correct overleveraged long positions could be beneficial for the health of the market. “However, a counter-move to eliminate overleveraged long positions would not hurt.”
At the time of this publication, the price of btc decreased slightly to $49,765.
Featured image created with DALL·E, chart from TradingView.com
