bitcoin price appears to be on the verge of surpassing its all-time high (ATH) at the high end of its current levels. The cryptocurrency has been on a bull run due to the launch of spot bitcoin exchange-traded funds (ETFs), which officially brought institutions into the nascent sector.
At the time of writing, bitcoin (btc) is trading at around $62,900 with a 3% gain in the last 24 hours. The previous week, the cryptocurrency recorded a critical 22% gain. It remained one of the top three gainers in the top 10 by market cap, trailing only Solana (25%) and Dogecoin (57%) over the same period.
bitcoin-Based Derivatives Hint at Higher Profits
Data from the Deribit derivatives platform crypto-derivatives-analytics-report-week-9-2024/” target=”_blank” rel=”nofollow”>indicates an increase in long positions by options traders. Since early February, these traders have accumulated significant call contracts with a strike price above $65,000.
At first, as the report indicates, the increase in bullish positions was thought to be part of a bitcoin “halving” strategy. However, btc ETF flows appear to be the key component behind the rally.
When the cryptocurrency entered the $60,000 area, several traders rushed to accumulate buy contracts, causing fear of missing out (FOMO) to spike to its current levels. The chart below shows that the FOMO buying started when btc surpassed the $57,000 level.
The increase in trading activity during yesterday's session caused a significant increase in Implied Volatility (IV). Overleveraged positions further boosted the metric, Deribit stated:
The rise from 62k to 64k was so fast, and with high leverage throughout the system, that when the selling hit the market, a waterfall caused btc to fall to 59k in 15 minutes, and some Alts (also hugely leveraged) fell a 50% on some exchanges before immediately. bouncing as btc jumped to 61.5k.
As the market continues to experience sudden moves due to high IV, there is little change in the market structure in the derivatives sector. In other words, Deribit still registers many bullish positions for the coming months, suggesting an optimistic conviction on the part of these players.
btc price in the short term
Despite the bull run, the price of bitcoin could fall as euphoria takes over the market. According to economist Alex Krüeger, the increase in trading volume throughout the derivatives sector indicates the formation of a “local summit”.
The analyst believes that retail trading has returned to the market driven by FOMO, which often hints at short-term difficulties for long-term traders. Krüger predicted further gains in the area of $70,000 through his official X account and then a drop in the area of $55,000.
The analyst stated:
The ATHs are inches apart. That's price discovery territory. So, it's very easy for things to get even crazier. This is simply not where one opens new long positions. It's too easy to get a quick color out of nowhere. Ideally, we see the funding cool off and the price consolidate below the ATH and then break out.
Dall-E cover image, Tradingview chart
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