Bitcoin hits new highs in the absence of ‘unhealthy’ leverage use — Will the rally continue?
Bitcoin (BTC) reached an all-time high of $109,827 on May 21 but struggled to maintain momentum, raising questions about the influence of derivatives markets. The current 7% annualized Bitcoin futures premium is within the neutral range, indicating a healthier derivatives market compared to the previous high in January, where the premium was 15%. Balanced order books and significant inflows of $1.37 billion into spot Bitcoin ETFs suggest that spot buyers drove the recent rally rather than derivatives traders. Forced liquidations of bearish futures positions were low, further supporting a spot-driven market. Despite some demand for put options, overall market indicators suggest potential for further price increases, influenced by macroeconomic factors and the US Federal Reserve's liquidity position.
