Bitcoin Breaks Above $112,000 Amid Lingering Market Wariness
Bitcoin (BTC) surged past the $112,000 mark on Monday, recovering from the $108,000 support level seen earlier last week. Despite this upward movement, derivative market indicators reveal that traders remain cautious, questioning whether Bitcoin can sustain momentum to challenge the $120,000 threshold.
Options Market Reflects Risk Aversion
Data from Deribit shows the 30-day options delta skew at 9%, indicating that put options—contracts betting on price declines—are priced at a premium relative to call options. This skew often signals risk aversion among traders. Although this may partly reflect recent market volatility rather than a firm bearish outlook, the put-to-call ratio demonstrated a notable increase in demand for protective puts on Monday, reversing a prior decline and underscoring a preference for neutral-to-bearish strategies.
ETF Outflows and Macro Factors Weigh on Sentiment
Investor caution is further evidenced by $383 million in net outflows from spot Bitcoin ETFs between Thursday and Friday. These withdrawals come despite Bitcoin’s successful defense of the $110,000 support level. Additionally, competition from Ether (ETH) as a corporate reserve asset is intensifying, with companies increasing their Ether holdings by around $200 million in the past week, according to StrategicETHReserve data.
Broader macroeconomic conditions also influence market sentiment. Weaker US labor data has heightened expectations of monetary easing, with traders now assigning a 73% probability that the Federal Reserve will reduce interest rates to 3.50% or lower by March 2026, up significantly from 41% a month ago, based on CME FedWatch data.
Futures Funding Rates Indicate Neutral Market Positioning
Examining Bitcoin’s perpetual futures market, the annualized funding rate currently stands at a neutral 11%, improving from a bearish 4% on Sunday. Typically, funding rates between 6% and 12% account for capital costs and exchange risks under normal conditions. This neutral stance suggests neither excessive bullish nor bearish pressure among futures traders.
Market dynamics are further complicated by increased competition from altcoins. Notably, Nasdaq’s recent filing with the US Securities and Exchange Commission to list tokenized equity securities and ETFs could shift investor attention away from Bitcoin.
Outlook: Momentum Faces Headwinds
Bitcoin derivatives data collectively signal skepticism toward the recent rally above $112,000. The exclusion of Strategy’s MicroStrategy (MSTR) from the S&P 500 rebalance last Friday may also contribute to muted bullish sentiment. While a rapid advance to $120,000 seems unlikely in the near term, stabilization in spot Bitcoin ETF flows could improve market sentiment and potentially catalyze renewed price momentum.
This article is for informational purposes only and does not constitute legal or investment advice. The opinions expressed are those of the author and do not necessarily reflect those of Cointelegraph.
FinOracleAI — Market View
Bitcoin’s recent price gain above $112,000 is met with cautious investor sentiment, as reflected in options premiums and neutral futures funding rates. The significant ETF outflows and macroeconomic uncertainties, including shifting interest rate expectations, are key headwinds. Short-term upside momentum appears limited until ETF flows stabilize and broader market confidence improves. Investors should monitor ETF inflows and macroeconomic data releases closely for signs of a shift in sentiment.
Impact: neutral
