INSUBCONTINENT EXCLUSIVE:
Key takeaways:Spot Bitcoin ETF inflows and low leverage suggest the BTC rally has room to grow.US Federal Reserve liquidity and weak bond
sales support a Bitcoin push beyond $110,000.Bitcoin (BTC) was unable to sustain its bullish momentum after reaching a new all-time high of
$109,827 on May 21, which led traders to question whether derivatives markets mainly drove the rally
From a broad perspective, the $77 billion in Bitcoin futures open interest has undoubtedly played a role
However, a closer look at the data shows a more positive outlook for further price gains.Bitcoin 2-month futures annualized premium
Source: Laevitas.chThe current 7% annualized Bitcoin futures premium is well within the neutral range of 5% to 10%, which has been typical
This indicator can easily exceed 30% during periods of strong optimism, so the current level is relatively low
At the same time, the absence of excessive leverage reduces concerns about a rally driven primarily by derivatives.For comparison, during
the previous Bitcoin $109,346 all-time high on Jan
20, the annualized futures premium reached 15%, showing a much higher level of leveraged bullish positions affecting the price
Therefore, the current Bitcoin derivatives market appears healthier, suggesting strong demand in spot markets.During the January bull run,
market.Coinbase Bitcoin/USD relative to competitors
Source: TradingView / CointelegraphWhile excessive buying pressure on a single exchange is not necessarily bearish, it can make it easier to
trigger unsustainable price surges when liquidity is low
net inflows to spot Bitcoin exchange-traded funds (ETFs) in the United States between May 15 and May 20 further suggests that spot buyers,
rather than derivatives traders, were the primary force behind the rally.Despite the lack of conviction in Bitcoin futures, several
indicators point to further upside
Forced liquidations of bearish BTC futures positions were relatively low at $170 million between May 18 and May 21, cementing the idea of a
In comparison, the rally to $104,000 on May 9 triggered $538 million in liquidations over three days.Related: Is Bitcoin price close to a
Source: Laevitas.chOn May 21, Bitcoin options markets showed a slight increase in demand for put (sell) options, but nothing unusual
For comparison, the put-to-call ratio at Deribit dropped to 0.4x during the previous bull run on Jan
macroeconomic factors, especially as the tariff war continues
Still, the potential for the price to reach $110,000 and higher is partly based on the weak position of the US Federal Reserve
Injecting liquidity could ease recession concerns, but it also reduces the appeal of government bonds, which favors risk-on assets like
Bitcoin.This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice
