Bitcoin (BTC) recouped some of its losses by climbing above $90,000 for the first time in almost a week after more than a month of selling pressure.
The general recovery in risk assets and the decline in volatility created room for investors to push prices higher.
While the rise was limited, it sparked renewed talk of higher levels in the markets. Digital assets are trading in tandem with stocks as expectations strengthen that the Fed may resume interest rate cuts at its December meeting. New inflows into BlackRock’s US Bitcoin ETF snapped the fund’s recent string of outflows. While liquidity remains low ahead of the Thanksgiving holiday, falling volatility and signs of a reduction in forced selling have led bulls to retest the question of whether the decline is complete.
“Liquidity is much lower right now, which means it takes a lot fewer transactions to move the price,” said Kaiko research analyst Adam McCarthy, attributing the sharp move to low holiday liquidity.
The return in sentiment is also evident in derivatives markets. According to Coinglass data, demand for long positions in the Bitcoin futures market, a crucial market for leveraged trading, is increasing, while open interest remains at moderate levels. Positive funding rates also indicate a return to bullish pressure on these contracts, which turned negative at the beginning of the week.
According to data from Deribit, a cryptocurrency exchange affiliated with Coinbase, call options with a strike price of $100,000 have reached their highest open interest on the options side. This has replaced the downside protection demand at $80,000 and $85,000 that dominated the market last week with bullish expectations.
*This is not investment advice.