Bitcoin (BTC) marked a significant milestone today as it soared past the $80,000 mark, a triumphant return to its previous peak seen in February. This surge represents a cumulative weekly gain of approximately 16%, a promising sign of Bitcoin’s resilient performance in spite of the global economic downturn.
The latest surge in Bitcoin’s value comes on the back of Donald Trump’s victory in the US presidential election, a development that has imbued a sense of optimism and expectancy within the digital asset community. It is anticipated that Trump’s win could usher in a more clear-cut regulatory framework for digital assets, a move that could further legitimise cryptocurrencies and foster their widespread adoption.
Data from Velo reveals that the annualized rolling premium on three-month Bitcoin futures on major exchanges such as Binance and Deribit has experienced a significant uptick in line with Bitcoin’s surge. The premium rose above 14% for the first time since June, while on the CME, the futures premium surpassed the 10% mark on Friday. This surge in premium indicates a growing bullish sentiment among investors, possibly enticing carry traders keen on exploiting price differences across markets.
The options markets have also been displaying an upward trend, with open interest in an $80,000 BTC call option on Deribit – a speculative bet that would catapult prices beyond $80,000 – reaching in excess of $1.6 billion. Traders had set their sights on this level even prior to the election, confident that Bitcoin would establish new records before the year draws to a close.
Data from Amberdata further highlights that the $80,000 strike price carries the highest negative gamma intensity, thereby heightening the probability of sharp price fluctuations should Bitcoin sustain its value above this level. A negative gamma position, in this case, implies a net short position at $80,000 for market makers, a scenario that could compel these liquidity providers to acquire additional Bitcoin if the price escalates. This, in turn, would stoke further bullish volatility within the market.
This recent Bitcoin surge underscores the inherent dynamism of the digital asset market and the significant potential it holds for investors. However, it is critical to remember that investment in cryptocurrencies, as with any other asset, should be undertaken with due diligence and careful consideration. The current market trends are not a guarantee of future performance, and potential investors should seek professional advice before deciding to invest.
*This is not investment advice.
