Bitcoin (BTC) price has finally broken out of a tight trading range after 12 days, surging by 12.7% in just 24 hours. The price reached a peak of $57,380, the highest level in over two years. This rally led to significant liquidations of short positions, totaling $313 million. However, despite the price surge, professional traders in the Bitcoin derivatives market are not showing much enthusiasm and are even opting for protective put options.
On the other hand, spot Bitcoin exchange-traded funds (ETFs) are continuing to accumulate coins at an impressive rate. In the past three days alone, these ETFs have acquired a total of 18,331 Bitcoin, worth over $970 million. BlackRock is currently leading the pack with holdings of over $7 billion, followed by Fidelity with $5 billion. This influx of Bitcoin is compensating for the outflow from Grayscale’s GBTC, which is losing popularity due to its higher fees compared to competitors.
Bitcoin bears are finding satisfaction in the belief that the United States economy is heading towards a recession. JPMorgan Chase CEO Jamie Dimon shares this opinion and expressed it during a conference in Miami. Dimon believes that the market is too confident about a soft landing and warns that the U.S. Federal Reserve (Fed) is expected to begin tapering soon. However, he does not anticipate a crisis similar to the 2008 financial crisis.
If Dimon’s predictions come true and the Fed keeps interest rates high, it could have a negative impact on the stock markets. Companies would face higher costs to refinance their debts, and investors would have fewer incentives to exit fixed-income positions. This scenario would not be particularly bullish for Bitcoin, as investors tend to seek shelter in U.S. Treasuries during times of uncertainty.
Analyzing Bitcoin derivatives metrics, it is evident that professional traders are showing a reasonable degree of skepticism. BTC monthly futures contracts have been trading at a premium of 13% to 18% over the past week, indicating a moderately bullish sentiment. Additionally, there is no significant increase in leverage-driven price surges, suggesting a lack of increased risk of liquidations.
When examining the Bitcoin options markets, there is only a slight reduction in demand for protective put options compared to call options. This indicates that traders are still hedging against a potential price correction. However, the previous week showed a much higher difference in demand, suggesting greater confidence in Bitcoin’s price.
Overall, professional traders seem caught off guard by Bitcoin’s recent rally. While some remain skeptical, others are cautiously optimistic. The path to $60,000 is still possible, but it would come as a surprise to most professional Bitcoin traders.
Disclaimer: This article is for informational purposes only and should not be taken as legal or investment advice. The views expressed here are solely those of the author and do not necessarily represent the views of Cointelegraph.