Summary
- Bitcoin rebounded after recovering the $90,000 level, but investor sentiment in the derivatives market remains conservative.
- Spot ETFs saw large net inflows, but 86%% of total open interest is concentrated in contracts expiring this month, indicating demand for long-dated futures has disappeared.
- Bitcoin's volatility has fallen relative to gold, reducing its upward momentum, and some analyses suggest its heyday may already be over.
Bitcoin recovered the $90,000 level and managed a rebound, but assessments say the market's underlying strength remains fragile. Despite the resumption of inflows into spot exchange-traded funds (ETF), investor sentiment in the derivatives market remains cautious.
On the 6th (local time), Bloomberg reported that Bett Lunde, head of K33 Research, said in a report, "There are signs that market sentiment is somewhat improving, but most investors remain on the sidelines," and pointed out that "86% of total open interest (OI) is concentrated in contracts expiring this month." This means demand for long-dated futures that would bet on sustained price increases has disappeared.
Indicators that gauge risk-on appetite are also weak. Spot trading volumes, volatility, and leverage ratios are all hovering around lows from before December last year. Funding rates for perpetual futures contracts are also staying at low levels, suggesting that building aggressive long positions is constrained.
However, the spot ETF market tells a different story. Selling pressure at the end of last year has turned into buying pressure in the new year. On the 5th, spot Bitcoin ETFs recorded the largest single-day net inflow since October 7 last year.
Some have raised fundamental questions about Bitcoin's asset value. The basis is that Bitcoin's upward momentum has been slowing compared with gold and equity markets recently. Mike McGlone, senior strategist at Bloomberg Intelligence, analyzed, "Bitcoin's volatility is becoming lower relative to gold," and said, "This suggests that the heyday when crypto assets delivered the highest returns is already past."
