Will Bitcoin Hit $100,000 in the Near Future?
Bitcoin (BTC) reached a price of $48,000 on February 9th, and recent activities from derivatives traders suggest that there will be more action in the coming days. The total capital stock in the BTC futures markets has exceeded the recent peak seen during the excitement over the spot ETF approval on January 11th, leading to optimism that the BTC price will soon follow suit.
The approval of the spot ETF on January 11th has generated increased public interest in BTC as a legitimate asset class. This has resulted in many institutions allocating a significant portion of their portfolio to acquiring BTC in recent weeks. However, market trends indicate that bitcoin derivatives markets have seen a greater influx of capital.
Coinglass’ open interest metric tracks real-time changes in the total capital stock invested in BTC perpetual futures markets. On February 12th, BTC open interest (OI) reached a milestone, surpassing $21.8 billion, its highest level since March 2022. A closer look at the charts reveals that BTC OI has already increased by $4.5 billion (25%) in February 2024.
Interestingly, this 25% increase in OI between February 1st and February 12th has outpaced the growth in BTC spot price, which has only risen by 15% from $41,860 to a peak of $48,820 during that period. Such rapid growth in OI typically indicates that the market is attracting new participants who are injecting fresh capital inflows. When OI growth outpaces spot prices, it can be a bullish signal for several reasons.
Firstly, it demonstrates a sense of urgency among traders who want to capitalize quickly on the current bullish sentiment in the market. Secondly, the strong interest from traders and investors signals confidence in BTC’s fundamental drivers in relation to the prevailing macroeconomic conditions.
As of February 12th, BTC is currently trading at $47,800. The last time BTC open interest reached its current $22 billion level, spot prices were well above the $50,000 range. Therefore, with BTC price currently undervalued compared to the capital inflows into the derivatives markets, there is a possibility of a bullish attempt to reclaim the $50,000 target in the coming days.
However, as observed in recent weeks, BTC bulls face significant resistance at the $48,900 level. Data from IntoTheBlock shows that 3.3 million addresses have acquired 1.2 million BTC at a minimum price of $48,915. Many of these investors have been holding at a loss for nearly 3 years, so a large number of them may sell once prices approach their break-even point.
If the bulls can overcome this sell-wall, a retest of the $50,000 territory is possible. On the other hand, the bears could regain control if they manage to force a major downswing below $40,000. However, this scenario seems unlikely considering the strong support at the $42,000 level. At that zone, 6.7 million addresses that acquired 3.01 million BTC at an average price of $42,047 could make frantic purchases to avoid incurring net losses.
