FameEX Hot Topics | Options Markets Project Bitcoin to Reach $111K by February

Bitcoin has witnessed significant activity in the futures market since December 5, with two major liquidation events exceeding $1 billion each. Despite this volatility, Bitcoin's price began and ended this period near $97,000. The most dramatic movement occurred between December 8 and 9, when Bitcoin fell sharply from $101,430 to $94,200, wiping out $2.9 billion in leveraged positions.

While this crash negatively impacted short-term sentiment, it has led to a healthier Bitcoin derivatives market. Reduced leverage, often a key indicator of overheating, has created a more balanced trading environment. Bitcoin futures open interest, which measures the total value of outstanding contracts, fell by 8% from 663,700 BTC on November 25 to 609,400 BTC on December 10. This decline occurred even after Bitcoin's $7,160 drop on December 9, demonstrating relatively stable demand for leverage despite the sharp price swings.

The funding rate, which measures the cost of holding perpetual futures contracts, peaked at 9% monthly on December 5. However, it normalized after Bitcoin's drop to $94,200, effectively eliminating excess retail leverage. This stabilization reduces the likelihood of cascading liquidations, helping to foster a more sustainable market environment. Although traders remain cautious about Bitcoin’s 72% price gain over the past three months, strong institutional inflows into U.S. spot Bitcoin ETFs, which have added $15.2 billion since October 10, indicate robust market demand.

Institutional activity has further bolstered market confidence. Between December 2 and 8, MicroStrategy acquired 21,550 BTC for $2.1 billion at an average price of $98,783 per Bitcoin. Riot Platforms raised $500 million in debt to fund additional acquisitions, while Marathon Digital added 11,774 BTC to its holdings during the same period. These significant purchases highlight growing institutional interest and long-term confidence in Bitcoin.

Optimism among professional traders remains strong, as Bitcoin monthly futures are trading at a 15% premium over spot prices, well above the typical 5% to 10% neutral range. Furthermore, options markets reflect bullish sentiment. A call option predicting Bitcoin to exceed $100,000 by February 28 is currently priced at BTC 0.112 ($11,000), implying a projected price of $111,000 within 80 days. This continued confidence among institutional investors and market makers underscores a positive outlook for Bitcoin despite recent volatility.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.