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Bitcoin (<a href="https://cointelegraph.com/bitcoin-price" rel="noopener noreferrer nofollow">BTC</a>) price finally broke to the upside after 12 days of trading within a tight 5% range, fluctuating between $50,430 and $52,970. The 12.7% rally in 24 hours reached a peak of $57,380, the highest level in over two years, leading to a significant $313 million in leverage short (sell) liquidations. However, Bitcoin derivatives metrics indicate that professional traders are not particularly enthusiastic, and some have even opted for protective put options.
<h2 id="spot-bitcoin-etfs-inflows-could-cede-as-recession-risk-increases">Spot Bitcoin ETFs inflows could cede as recession risk increases</h2>
Fortunately for bulls, spot Bitcoin exchange-traded funds (ETFs) <a href="https://cointelegraph.com/news/spot-bitcoin-etfs-accumulate-300-000" rel="noopener noreferrer nofollow">continue to accumulate</a> coins at an impressive rate. In the past three working days alone, they have amassed a total of 18,331 Bitcoin, valued at over $970 million, according to a post by @HODL15Capital on the X social network. BlackRock has surpassed $7 billion in holdings, followed by Fidelity at $5 billion, more than compensating for the outflow from Grayscale’s GBTC, which is dwindling due to its 1.5% fees being much higher than the competition.
Bitcoin bears are finding satisfaction in the fact that the United States economy is heading towards a recession, an opinion <a href="https://www.cnbc.com/2024/02/26/jamie-dimon-is-cautious-about-everything-as-he-sees-risks-to-a-soft-landing.html" target="_blank" rel="noopener noreferrer nofollow">shared</a> by JPMorgan Chase CEO Jamie Dimon. During a conference in Miami on Feb. 26, Dimon expressed that the market is overconfident about a soft landing, as reported by CNBC. The JPMorgan CEO observed that the U.S. Federal Reserve (Fed) is expected to begin tapering soon, but Dimon does not anticipate similarities to the 2008 financial crisis.
If Jamie Dimon is correct and the odds of the Fed keeping interest rates high are higher than the market expects, this would have a negative impact on stock markets. Firstly, companies would face higher costs to refinance their debts, as the interest rate two years prior was around 1.5%. More importantly, investors would have fewer incentives to exit fixed-income positions, as the current yield for 2-year U.S. Treasuries is 4.7%, higher than U.S. inflation expectations at 3%.
Such a scenario is not particularly bullish for Bitcoin, given that traders are unlikely to continue accumulating if the fear of an economic recession grows. Despite Bitcoin's scarcity and <a href="https://cointelegraph.com/news/bitcoin-defend-key-price-level-44k-next" rel="noopener noreferrer nofollow">lack of correlation</a> with the stock market, investors tend to seek shelter in U.S. Treasuries whenever uncertainty arises. Thus, building a case favorable for cryptocurrencies is challenging, as the market still perceives them as a risk-on asset.
<h2 id="bitcoin-derivatives-metrics-show-a-reasonable-degree-of-skepticism">Bitcoin derivatives metrics show a reasonable degree of skepticism</h2>
To understand how professional traders are leaning in Bitcoin derivatives, one should initiate the analysis with BTC monthly futures contracts. In neutral markets, these instruments typically trade at a premium of 5% to 10% to account for their extended settlement period.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-02/bd9582b6-1352-4f84-99af-57df1d69ffcd.png">
 <figcaption style="text-align: center;">Bitcoin 3-month futures annualized premium. Source: Laevitas.ch
 </figcaption>
</figure>
Data reveals that the annualized BTC futures premium has consistently ranged between 13% and 18% over the past week, which is considered healthy and moderately bullish. Furthermore, there is no indication of price surges driven by leverage, signaling a lack of increased risk of cascading liquidations.
Related: <a href="https://cointelegraph.com/news/gbtc-lowest-ever-outflow-bitcoin-etfs-2-week-inflow-high" rel="noopener noreferrer nofollow">GBTC hits lowest-ever $22M outflow, raising hopes for end to Bitcoin bleed</a>
Traders should also analyze the Bitcoin options markets to evaluate if the recent rally has prompted strategies aiming to hedge against a potential price correction. To address this, one should monitor the demand difference between call (buy) and put (sell) options.
<figure><img src="https://s3.cointelegraph.com/uploads/2024-02/82853f52-181e-4fe9-a3dd-6e66dbab4b2d.png">
 <figcaption style="text-align: center;">Bitcoin options put-to-call volume ratio. Source: Laevitas
 </figcaption>
</figure>
Notably, the period from Feb. 20 to Feb. 26 witnessed a mere 15% reduction in demand for protective put options relative to call options. In contrast, the preceding week showed an average difference of 42% versus call options, indicating much higher confidence in Bitcoin’s price.
From a bullish perspective, one could argue that professional traders were caught off guard as Bitcoin surpassed the $52,500 resistance. Simultaneously, bears would find solace in knowing that whales and market makers remain skeptical of the recent rally, according to derivatives metrics. Is the path to $60,000 still open? Certainly, but it would come as a surprise to most professional Bitcoin traders.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin rallies to 2-year high, but derivatives traders not betting on further gains

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