Bitcoin's price surged to a new all-time high of $124,089 before experiencing a sharp correction. Despite this volatility, derivatives data suggests that traders remain relatively calm and see limited upside potential for the near future.
Bitcoin 's price surged to a record high of $124,089 on Thursday, but faced a sharp rejection after reaching this peak. The subsequent drop below $117,500 triggered $227 million in leveraged liquidations on bullish positions. Despite this volatility, derivatives metrics remained largely unaffected by the price swing. The Bitcoin futures premium , an indicator reflecting market sentiment towards future price movements, stood at 9%, falling within the neutral 5%–10% range.
This suggests that the recent price surge was not fueled by excessive leverage and that traders remained relatively calm despite the drop below $118,000. However, the data hints at a lack of confidence in a rally toward $150,000.Some attribute Bitcoin's dip to the 3.3% annual rise in the US Producer Price Index (PPI) for July, which exceeded expectations. The initial market reaction saw a decline in the perceived likelihood of interest rate cuts by the Federal Reserve. Nevertheless, the S&P 500 ultimately recovered its losses, indicating that Bitcoin's correction might be driven by factors beyond US inflation data.According to the CME FedWatch tool, the probability of the Federal Reserve cutting interest rates to 3.75% or lower by January 2024 currently stands at 61%, down from 67% a week earlier. This reflects reduced optimism for aggressive monetary easing, a factor that typically weighs on risk assets such as Bitcoin. Further fuel for the market’s uncertainty came from comments from US Treasury Secretary Janet Yellen, who dismissed the notion of allocating potential Treasury gold reevaluation proceeds into Bitcoin. This sentiment contradicted prevailing market expectations.To gauge traders' expectations for future price movements, one can analyze the Bitcoin options delta skew. A higher cost for put (sell) options typically indicates a bearish market, causing the indicator to move above the neutral 6% threshold. Currently, the Bitcoin options skew stands at 3%, suggesting a balanced risk outlook consistent with a healthy market
Bitcoin Price Record High Volatility Futures Premium Options Skew Inflation Federal Reserve
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