The world’s most-watched cryptocurrency approached the $65,500 threshold at the beginning of the week, reviving traders’ hopes for soon reaching the psychological milestone of $70,000. The main catalyst was the easing of geopolitical tensions and growing optimism in derivatives markets, where the funding rate jumped to a three-week high. However, the market is currently sending mixed signals. While speculators are aggressively opening long positions, capital continues to flow massively out of U.S. spot ETF funds, indicating a deep divide between trader enthusiasm and major institutional caution.
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Bulls take the reins on derivatives
Clear evidence of awakening optimism is the annual funding rate for bitcoin perpetual futures contracts, which rose to 7%. Although this value still remains in neutral territory, it clearly shows that buyers betting on further growth are starting to gain the upper hand in the market. Macroeconomic factors have also contributed to the improved sentiment, particularly the decline in Brent crude oil prices to their lowest level since March and encouraging statements regarding stability in the Strait of Hormuz, which significantly reduced fears of a new global inflationary shock.
The return of buying appetite is also confirmed by data from the order books of the largest cryptocurrency exchanges, where buy orders in close proximity to the current price exceeded sell orders by approximately $12 million. This situation represents a sharp reversal from the previous weekend, when sellers dominated the market. Additionally, speculation about forced asset sales by the giant holder Strategy has also subsided, as it reassured investors by announcing that it had increased its cash dollar reserves to a comfortable $1.4 billion, and thus no liquidation of its bitcoins is imminent.
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Cautious options and record ETF fund outflows
Despite strong pressure in the spot market, however, the options market urges maximum caution, as demand for hedging put options was more than double that of call options at the start of the week. This trend indicates that more sophisticated investors are actively hedging against an unexpected price drop. In traditional markets, there is also a simultaneous sell-off of stocks, gold, and government bonds, which means only one thing – major players currently prefer holding safe cash and are broadly reducing their risk.
The biggest obstacle on the path upward thus remains U.S. spot bitcoin ETF funds, which have recorded their sixth consecutive week of net capital outflows, with a historically record $6.35 billion disappearing from them over the past 30 days. Without renewed inflow of this institutional capital, it will be extremely difficult for bitcoin to break through strong resistance levels and maintain its growth trend. Future developments will thus be entirely determined by the tug-of-war between short-term retail trader enthusiasm and the cold calculations of global institutions.
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