Key takeaways:
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Bitcoin options skew and futures funding rates highlight persistent caution, despite BTC defending the $110,000 support level.
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spot Bitcoin ETF outflows and Strategy’s S&P 500 index negative decision continue weighing on trader sentiment.
Bitcoin (BTC) climbed above $112,000 on Monday, pulling away from the $108,000 level seen the previous week. The advance, however, has not been strong enough to restore confidence, according to BTC derivatives metrics. Traders are now trying to determine what is preventing sentiment from improving and whether Bitcoin has the momentum to push past $120,000.
The BTC options delta skew currently stands at 9%, meaning put (sell) options are priced at a premium compared to equivalent call (buy) instruments. This typically signals risk aversion, though it may simply reflect last week’s trading conditions rather than a clear expectation of a sharp decline. A genuine surge in demand for downside protection would be evident in the options put-to-call ratio.
On Monday, demand for put options jumped, reversing the trend of the prior two sessions. The data points to a stronger appetite for neutral-to-bearish strategies, suggesting traders remain cautious about a potential drop below $108,000.
Some of this lack of enthusiasm stems from Bitcoin’s inability to mirror the fresh all-time highs in both the S&P 500 and gold. Weaker-than-expected labor market figures in the United States reinforced expectations of monetary easing.
Traders now assign a 73% probability that interest rates will fall to 3.50% or lower by March 2026, up from 41% just one month ago, according to the CME FedWatch tool.
Spot Bitcoin ETFs face outflows as corporate Ether reserves gain traction
Adding to the caution, spot Bitcoin ETFs recorded $383 million in net outflows between Thursday and Friday. The withdrawals likely unnerved investors even though Bitcoin successfully held the $110,000 support. Competition from Ether (ETH) as a corporate reserve asset may also be influencing sentiment, as companies have allocated an additional $200 million over the past week alone, according to StrategicETHReserve data.
To determine whether bearish sentiment is confined to BTC options, it is necessary to look at the Bitcoin futures market. Under normal conditions, funding rates on perpetual contracts typically range from 6% to 12% to account for the cost of capital and exchange-related risks.
At present, Bitcoin’s perpetual futures funding rate sits at a neutral 11%. While neutral, this marks an improvement from the bearish 4% level observed on Sunday. Traders may be responding to heightened competition from altcoins, particularly after Nasdaq filed with the US Securities and Exchange Commission to list tokenized equity securities and exchange-traded funds (ETFs).
Related: Crypto ETFs log outflows as Ether funds shed $912M–Report
Bitcoin derivatives continue to reflect skepticism toward the latest rally, as both options and futures show little enthusiasm for the move above $112,000. What could shift traders out of this cautious stance remains uncertain. The disappointment that Strategy (MSTR) was excluded from the S&P 500 rebalance on Friday may also explain some of the muted sentiment among bulls.
For now, a surge to $120,000 appears unlikely. Still, if spot Bitcoin ETFs manage to stabilize, overall sentiment could quickly improve and set the stage for renewed price momentum.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.