Bitcoin tops US$90,000 as options point towards shifting sentiment
A reversal of bearish sentiment is reflected across derivatives markets
[NEW YORK] Bitcoin climbed above US$90,000 for the first time in almost a week, clawing back ground after a more than a month-long sell-off, as a broad rally in risk assets and easing volatility gave traders room to push higher.
The advance, though modest, put higher levels back in focus, with digital assets moving in step with equities amid growing conviction that the US Federal Reserve may soon resume cutting interest rates. BlackRock’s US Bitcoin ETF attracted fresh inflows, snapping a streak of redemptions.
Liquidity remains thin ahead of the Thanksgiving break, but with volatility ebbing and little evidence of fresh forced selling, bulls appear to be testing whether the worst of the drawdown has passed.
“Likely the sharp nature of the move is tied to the holiday market. Essentially, there’s less liquidity right now, meaning it takes a lot less to move the dial,” said Adam McCarthy, a research analyst at Kaiko.
Bitcoin rose as much as 4 per cent to US$90,460 on Wednesday (Nov 26), reducing its dropped from an all-time high of just north of US$126,000 reached in early October to about 28 per cent.
Despite the retreat of as much as 36 per cent since the record high reached in early October, implied volatility has remained contained, a shift that reflects how the institutionalisation of the token is reshaping risk transmission. Early in its history, Bitcoin’s value was primarily driven by speculation from traders seeking to profit from its frequent large price swings.
“This week’s high 80s Bitcoin level has served as a consolidation support level, on the back of negative downward trends over the past several weeks,” said Jasper De Maere, desk strategist at Wintermute.
A reversal of bearish sentiment is reflected across derivatives markets. Bitcoin perpetual futures, a key market for traders to make leveraged crypto wagers, are seeing more demand for long positions with moderate open interest, according to data from Coinglass. The positive funding rate for such contracts suggests bullish bets have been back in majority after flipping negative earlier this week.
Call options at the strike of US$100,000 are seeing the most open interest after downside protection around US$80,000 and US$85,000 had dominated the market over the last week, according to Coinbase-owned crypto exchange Deribit.
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“Over the past couple of weeks, speculative long positioning has been significantly reduced as evidenced by the decline in perpetual open interest and funding rates, leaving crypto primed for a move higher,” said Spencer Hallarn, global head of OTC trading at crypto investment firm GSR.
Crypto prices tumbled in early October after Donald Trump roiled financial markets worldwide with a threat to bolster tariffs. The drop has erased more than US$1 trillion in digital-asset market value and unleashed a wave of forced liquidations.
Investors appear to be testing the market again now. Bitcoin exchange-traded funds (ETFs) saw inflows of about US$130 million on Tuesday, according to Bloomberg Intelligence. Investors have pulled nearly US$3.6 billion from the 12 US-listed Bitcoin funds in November, the heaviest monthly outflow since the products launched and the first real stress test of the ETF era. BLOOMBERG
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