Key Insights
- Bitcoin price has just climbed to $112,958. However, traders are still wary of its price action.
- The recent Spot Bitcoin ETF outflows have been another source of pressure on this sentiment.
- Long-term holders and institutional hedging are currently showing strong support.
Bitcoin price pushed above $112,000 this week, after reaching around $112,958 at its peak. The move came after last week’s defence of the $108,000 support level. Yet derivatives data show that traders are still cautious, despite the rally.
Options Data Shows Hesitation
The options markets have shown this hesitation. For example, the 30-day delta skew at Deribit currently sits at 9%. This shows a preference for puts over calls.
Simply put, traders pay more to protect against downside risk than to bet on gains. This doesn’t always mean that a sharp drop is coming. However, it shows a reluctance to embrace a bullish outlook.
According to analyst BitBull in a recent X update, Bitcoin’s 1-month 25 Delta Skew has also risen towards new highs. This shows the same outlook as the 30-day delta skew.
The main takeaway from this is that investors are hedging. They are aware that downside risks exist and are preparing against this.
These large players are adding exposure but protecting themselves against volatility, at least in the near term.
ETF Outflows Are Keeping Sentiment Under Pressure
Another reason for caution is the performance of spot Bitcoin ETFs. Between Thursday and Friday, data from Farside Investors shows that these products saw $383 million in net outflows. This setback weighed on market confidence even though Bitcoin held above $110,000.
At the same time, corporate interest is moving toward Ether. Companies allocated an additional $200 million into Ether reserves last week, according to StrategicETHReserve.
The move is another source of competition for Bitcoin as the preferred asset for institutional balance sheets. Moreover, the disappointment around MicroStrategy’s exclusion from the S&P 500 damaged enthusiasm somewhat.
Many traders had hoped the inclusion of the Bitcoin giant would be yet another milestone for adoption. Instead, the direct opposite happened.
Bitcoin Price Support Strengthens Beneath the Surface
Despite visible caution, Bitcoin’s foundation looks stronger than it appears. Long-term holders are still steady, and coins were purchased between 2017 and 2019. They are now moving into the 7+ year holding category.
These coins have not been sold and have aged into a new bracket. Analyst Cas Abbé noted that this shows conviction.
“These aren’t weak hands. They’ve survived halvings, crashes, FUD waves, and blow-off tops,” Abbé said. This behaviour further strengthens Bitcoin’s status as a long-term store of value.
Futures Market Offers a Neutral Signal
More than options, Bitcoin futures are telling a slightly different story. Funding rates on perpetual contracts have recovered to a neutral 11% annualised.
This is in comparison to just 4% over the last weekend. Under normal conditions, rates between 6 and 12% indicate a balance between long and short positions.
This improvement means the market is much less bearish than the options markets show. Traders may be adjusting as the altcoin market’s competition rises.
Nasdaq’s filing with the U.S. Securities and Exchange Commission to list tokenised equities and ETFs is also a new dynamic. Some traders may be faltering. Still, the overall environment remains balanced.
Technical Picture Shows Weakening Resistance
According to the charts, Bitcoin recently broke out of a multi-week downtrend. It has closed above this breakout line multiple times and has confirmed the move.
Overall, Resistance remains near $113,500, where the price faced rejection in August.
This rejection, however, has been shallow. Bitcoin quickly rebounded and returned to test the level again. Analyst Rekt Capital recently noted that this resistance may be losing strength.
Finally, the repeated retests of $113,500 without strong rejection indicate that resistance could break down. If Bitcoin closes above this level, the following price action may carry it toward $120,000.
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