Flow

FOMO

Bitcoin

when

The price of Bitcoin seems on the brink of blasting past its all-time high (ATH) at the high area of its current levels. The cryptocurrency has been on a bull run due to the launch of spot Bitcoin Exchange Traded Funds (ETF), which officially onboarded institutions to the nascent sector. 
As of this writing, Bitcoin (BTC) trades at around $62,900 with a 3% profit in the last 24 hours. In the previous week, the cryptocurrency recorded a critical 22% profit. It stood as one of the three top gainers in the top 10 by market cap, only surpassed by Solana (25%) and Dogecoin (57%) in the same period. 
<img loading="lazy" decoding="async" class="wp-image-590785 size-large" src="https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=860&amp;resize=860%2C410" alt="Bitcoin BTC BTCUSDT price" width="860" height="410" srcset="https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=2372 2372w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=860&amp;resize=860%2C410 860w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=2048 2048w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-BTC-BTCUSDT-price.png?w=1140 1140w" sizes="(max-width: 860px) 100vw, 860px" data-recalc-dims="1"> 
<h2 id="bitcoin-based-derivatives-hint-at-further-gains">Bitcoin-Based Derivatives Hint At Further Gains</h2> 
Data from the derivatives platform Deribit <a href="https://insights.deribit.com/industry/crypto-derivatives-analytics-report-week-9-2024/" target="_blank" rel="noopener nofollow">indicates</a> a spike in long positions by Options operators. Since early February, these traders have accumulated important call (buy) contracts with a strike price above $65,000. 
At first, as the report indicates, the increase in bullish positions was thought to be part of a Bitcoin “Halving” strategy. However, the BTC ETF Flows seem to be the key component behind the rally. 
As cryptocurrency entered the $60,000 area, several operators rushed to accumulate call contracts, leading to a Fear Of Missing Out (FOMO) rally to its current levels. The chart below shows that the FOMO buying began when BTC breached the $57,000 level. 
<img loading="lazy" decoding="async" class="wp-image-590780 size-large" src="https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-price-BTC-BTCUSDT-chart-1-options-flow.png?w=587&amp;resize=587%2C450" alt="Bitcoin price BTC BTCUSDT chart 1 options flow" width="587" height="450" srcset="https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-price-BTC-BTCUSDT-chart-1-options-flow.png?w=587&amp;resize=587%2C450 587w, https://www.newsbtc.com/wp-content/uploads/2024/02/Bitcoin-price-BTC-BTCUSDT-chart-1-options-flow.png?w=460 460w" sizes="(max-width: 587px) 100vw, 587px" data-recalc-dims="1"> 
The spike in trading activity during yesterday’s session led to a significant jump in Implied Volatility (IV). Overleveraged positions further propelled the metric, Deribit stated: 
<blockquote>
 The 62k to 64k surge was so quick, and with high leverage across the whole system, that when sales hit the market a cascade sent BTC down to 59k in 15mins, and some Alts (also massively leveraged) dropped 50% on some exchanges before promptly bouncing as BTC jumped to 61.5k.
</blockquote> 
As the market continues to experience sudden moves due to the high IV, there is little change in the market structure in the derivatives sector. In other words, Deribit still records a lot of bullish positions for the coming months, which suggests optimistic conviction by these players. 
<h2 id="btc-price-on-the-short-timeframe">BTC Price On The Short Timeframe</h2> 
Despite the bull run, the Bitcoin price could dip as euphoria takes over the market. According to economist Alex Krüeger, the spike in trading volume <a href="https://twitter.com/krugermacro/status/1763230579657748845" target="_blank" rel="noopener nofollow">across the derivatives sector indicates</a> the formation of a “local top.” 
The analyst believes that retail has returned to the market driven by FOMO, which often hints at short-term predicaments for long traders. Krüger predicted further gains into the $70,000 area via his official X account and then a drop into the $55,000 area. 
The analyst stated: 
<blockquote>
 ATH are inches away. That’s price discovery territory. Thus very easy for things to get even crazier. This is just not where one opens new longs. Too easy to get a quick flush out of nowhere. Ideally we see funding cool down and price consolidate below ATH then break out.
</blockquote> 
Cover image from Dall-E, Chart from Tradingview

FOMO Fuels Bitcoin’s 35% Jump, Options Flow Hints At Bigger Upswing

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