Key points:
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Bitcoin derivatives show a decrease in demand for downside protection, indicating an update in investor confidence.
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The growing tariffs on Japan and South Korea have increased fears of recession and increased Bitcoin’s appeal as a hedge.
Bitcoin (BTCIts trading range has been between $107,300 and $110,600 since Wednesday, heightening speculation about the possibility of sudden price rallies. Market participants are increasingly confident that new liquidity injections by major central banks can serve as a catalyst for the Bitcoin bull run.
Market analyst Tedpillows pointed out that Bitcoin lags behind the global currency supply chart. If the historical correlation between the two remains intact, Bitcoin can be positioned as obtainable. In addition, X user TEDPILLOWS believes that the delay in the U.S. import tariff deadline “means Bitcoin reaches a green signal of $120,000.”
U.S. Treasury Secretary Scott Bessent says imports tariff For countries that have not yet reached a deal with President Donald Trump, the increase will be made on August 11. Initially, the government set July 9 as the deadline for negotiations, so investors welcomed the expansion, a sign of avoiding progress in the trade war.
On Saturday, demand Put (Sale) option Soaring on deribit, raising the pat-all-call ratio to its highest level in more than a year. Although this abnormal activity may reflect an increased demand for downside protection, the effect seems to have disappeared. By Monday, the indicator had returned to 0.8, preferring the phone (buy) option.
If traders significantly increase their leveraged bearish bets on Bitcoin, then BTC futures premiums may be affected. Under neutral conditions, monthly contracts are usually traded at a premium of 5% to 10% to compensate for longer settlement periods. A spike in short (sell) demand tends to increase premiums below 5%.
Futures data support the notion of increased bearish sentiment over the weekend, as the premium of BTC futures fell to 3.5% on Saturday, down from 4.5% on Friday. But by Monday, the premium rose by 5% of the neutral marker even though BTC was trading below $108,000.
Bitcoin derivatives perform despite wider fears of recession
Bitcoin Derivative Index There may not be a bullish momentum, but the sharp demand for downside protection seems to have passed. The shift shows a regaining of investor confidence, especially notably, the S&P 500 fell 0.9% on Monday.
Related: Despite the inflow of $1B by BTC ETF, Bitcoin’s price fell to $107,000 – what is behind the move?
Concerns about the recession have deepened after U.S. President Trump announced 25% tariffs on imports from Japan and South Korea have intensified. In response, the yield on U.S. Treasury notes rose to its highest level as investors demanded a higher return on holding government debt.
Trade-related tensions have prompted people to move towards risk avoidance more widely. Still, Bitcoin’s ability remained above $107,000, coupled with improved derivatives metrics and strengthened the case’s gains to $120,000.
Ultimately, whether or not this forecast is realized will depend on a larger change in investor perception, from viewing Bitcoin as a risky asset to Embrace it as a hedge and alternative financial systems.
This article is for general information purposes and is not intended to be considered legal or investment advice. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent Cointelegraph’s views and opinions.
