Bitcoin derivatives data shows an ongoing shift from bearish to bullish sentiment among professional traders.
Analysts are now eyeing a Bitcoin price breakout towards $120,000 in the near term.
Economic uncertainty, including US tariff announcements, is strengthening Bitcoin's appeal as a hedge asset.
The surge in Bitcoin's futures open interest by 7% over 30 days indicates that new capital is entering the market to support an uptrend.
Despite bullish sentiment, Bitcoin faces immediate resistance around $109,500 and support at the 200-day EMA and $107,000.
Speculation around Bitcoin is running hot once again.
The cryptocurrency is now being discussed heavily, not for breaking new records, but because of the increasingly bullish data from the derivatives and futures markets.
Professional traders are now pulling back on bearish positions, and open interest in futures on the cryptocurrency is climbing steadily.
Because of this, analysts are eyeing a breakout that could push Bitcoin toward $120,000 in the near term.
Bitcoin has been trading in a tight range between $107,300 and $110,600 since last Wednesday.
While this has been stressful for investors so far, market data shows that professional traders who had hedged their positions with bearish bets (especially via put options) are now retreating.
Over the weekend, there was a brief spike in demand for downside protection through put options.
In fact, Deribit’s put-to-call ratio reached its highest level in over a year.
However, by Monday, that ratio fell back to 0.8, which shows that the bearish sentiment was dying out as traders shifted their interest to call options (or bets that Bitcoin will rise).
Buy/Sell Volumes and Open Interest change | Source: Laevitas
Adding to this narrative, the Bitcoin futures premium dropped to 3.5% on Saturday, in a show of rising bearish sentiment.
However, in the same fashion as Deribit’s put-to-call ratio, it quickly recovered above the neutral 5% level by Monday.
This showed that investor confidence came back into play, even as the spot price hovered below $108,000.
Worldwide economic uncertainty is also playing a role in Bitcoin’s recent stability.
The United States recently announced it would raise tariffs on imports from Japan and South Korea starting from 11 August, unless trade agreements are reached.
These measures have resparked fears of a worldwide economic slowdown and recession. It has also prompted investors to seek out hedges, with Bitcoin being a prime candidate.
This is supported by the rising U.S. Treasury yields, especially the 10-year note, which recently hit a two-week high.
Typically, when yields rise, investors tend to demand higher returns to hold risk-free government debt.
However, in this case, the rise in yields has coincided with Bitcoin’s resilience. This showed that investors are more and more considering Bitcoin a safe-haven asset in times of financial tension.
According to recent updates from market analyst Ted Pillows, Bitcoin still trails behind the worldwide monetary supply chart.
If historical correlations between liquidity and Bitcoin’s price hold true, the next leg up may be closer than anyone realizes.
He even went as far as suggesting that delayed tariff deadlines from the U.S. are a "green signal" for Bitcoin to aim for the $120,000 mark.
Another strong indicator of the rise in optimism has been the surge in Bitcoin’s futures open interest (OI), which climbed by 7% over the past 30 days.
This stands as the first consistent uptick in open interest since the market crashed by around 12% between May and mid-June.
Historically, rising OI alongside price generally shows that new capital is entering the market to support an uptrend.
Even though OI has not yet broken above the 10% mark, it shows that confidence from traders is on the rise.
All of the above being said, it is worth mentioning that Bitcoin is sitting in a minefield.
After forming a double top around $109,500, the price briefly pulled back to the $108,000 level.
Despite this dip, BTC has held its support near the 200-day exponential moving average (EMA) on the one-hour chart, which many traders consider to be a strong short-term indicator.
Bitcoin and its 200-day EMA | Source: TradingView
However, analysts continue to warn of a possible “equal lows” dip below $107,000.
For context, equal lows refers to areas of price support that have been tested multiple times. A sweep of these lows could be a deliberate move by larger players to trigger stop-losses before prices push upward.
This means that if Bitcoin drops below $107,000, it may briefly fill the fair value gap down to $106,300.
A strong bounce from that level, with high buy volume, would confirm bullish intent. If not, deeper corrections to $105,000 could be on the table.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.