Bitcoin Hits All-Time High of $107,700 Amid Cautious Options Data
Bitcoin price continues to rise, surpassing 10% weekly gains and reaching an all-time high of $107,700. Despite this growth, options data indicates that traders are not pursuing new highs for Bitcoin.
The rally follows Donald Trump's victory in early November 2024, with investors optimistic about the US establishing a strategic Bitcoin reserve. Some analysts predict BTC could reach between $150K and $200K by late 2025.
However, the Bitcoin options market reflects caution. Data from Deribit shows a negative 25-delta risk reversal for options expiring this Friday, indicating higher demand for put options, which provide downside protection. Puts expiring on December 27 have a slight premium over calls, while March options show a modest call bias under three volatility points.
This marks a shift from recent trends where traders actively pursued new highs, pushing both short-term and long-term call biases above four or five volatility points. Recently, short-term risk reversals exhibited stronger call biases than longer-term ones.
Recent block trades on Deribit also indicate a bearish sentiment, highlighted by a significant short position in the $108,000 strike call expiring on December 27, followed by long positions in $100,000 strike puts expiring on December 27 and January 3.
How Will Bitcoin Price React after FOMC Meeting?
Trader caution stems from concerns regarding the upcoming Federal Reserve meeting, where a 25 basis points rate cut is expected, along with indications of fewer or slower rate reductions for 2025. This scenario could increase bond yields, strengthen the dollar, and diminish the appeal of riskier assets. Experienced BTC traders appear to be preparing for a potential market correction.
Conversely, retail optimism for Bitcoin remains robust, supported by institutional purchases from MicroStrategy and strong inflows into spot Bitcoin ETFs, with BlackRock's IBIT exceeding $36 billion in net inflows.