Bitcoin (BTC) price has finally broken out of its tight trading range after 12 days, surging by 12.7% in just 24 hours. The price reached a peak of $57,380, the highest it has been in over two years. This rally has led to a significant amount of leverage short (sell) liquidations, totaling $313 million. However, despite this bullish move, professional traders in the Bitcoin derivatives market seem to be cautious, with some opting for protective put options.
While professional traders may be hesitant, spot Bitcoin exchange-traded funds (ETFs) continue to accumulate coins at an impressive rate. In the past three working days alone, these ETFs have acquired 18,331 Bitcoin, valued at over $970 million. BlackRock holds over $7 billion in Bitcoin, followed by Fidelity with $5 billion. This accumulation by spot Bitcoin ETFs compensates for the outflow from Grayscale’s GBTC, which has been losing assets due to its high fees.
Bitcoin bears find satisfaction in the belief that the United States economy is headed for a recession, a sentiment shared by JPMorgan Chase CEO Jamie Dimon. Dimon expressed this opinion during a conference in Miami, stating that the market is too confident about a soft landing. He believes that the U.S. Federal Reserve (Fed) will start tapering soon, but he does not expect it to lead to a financial crisis similar to the one in 2008.
If Dimon’s prediction is accurate and the Fed keeps interest rates high, it could have a negative impact on stock markets. Companies would face higher costs to refinance their debts, and investors would have fewer reasons to exit fixed-income positions. This scenario is not particularly bullish for Bitcoin, as investors tend to seek shelter in U.S. Treasuries during times of economic uncertainty.
Bitcoin derivatives metrics show a reasonable degree of skepticism among professional traders. BTC futures contracts have been trading at a premium of 13% to 18% over the past week, which is considered healthy and moderately bullish. There is also no evidence of price surges driven by leverage, indicating a lack of increased risk of liquidations.
In the Bitcoin options market, there has been a slight reduction in demand for protective put options compared to call options. However, this reduction is only 15%, suggesting that there is still confidence in Bitcoin’s price. This can be seen as both bullish and bearish, depending on one’s perspective.
Overall, professional traders seem to have been caught off guard by Bitcoin’s recent surge, and there is still skepticism among whales and market makers. While the path to $60,000 is still possible, 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 financial or investment advice. The views expressed are those of the author and do not necessarily reflect the views of Cointelegraph.