Is Bitcoin $100,000 Goal In Jeopardy? Options Market Show Increased Downside Protection

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As a seasoned researcher with over two decades of experience in the financial markets, I have seen bull runs and bear markets come and go. The current crypto landscape is reminiscent of the dot-com boom of the late 90s, albeit with a more volatile twist.

As focus moves towards alternative cryptocurrencies, Bitcoin (BTC) has momentarily halted its upward trajectory that’s been dominant over the past month. At present, it’s trading approximately 3.8% lower than its all-time high of $99,540, leading some to wonder about the longevity of this growth surge and if a downturn might occur as the year winds down.

Investors Flock To Ethereum And XRP

As a researcher delving into the intricacies of the financial market, I’ve observed an ongoing robust institutional investment trend, notably from entities such as MicroStrategy who continue to amass Bitcoin. However, it’s interesting to note a discernible alteration in the pattern of capital allocation.

According to Newhouse, there’s a growing trend in the wider cryptocurrency market of investment funds moving around, with both large institutions and individual investors getting involved.

The fact that investors are moving their focus towards other cryptocurrencies like Ethereum (ETH) and XRP suggests that as Bitcoin becomes more stable, attention is gradually being diverted from it to these digital assets that were once overshadowed by Bitcoin.

After Donald Trump’s election win and his known support for cryptocurrencies, optimism towards potential U.S. regulatory changes has grown. This positive sentiment has significantly boosted the value of XRP, causing it to surge by an impressive 400% within a single month.

This optimism is similarly seen in the historic monthly net investments into Bitcoin and Ethereum exchange-traded funds (ETFs) in November, which totaled $6.5 billion for Bitcoin and $1.1 billion for Ethereum. Data from Bloomberg indicates that last Friday set a new record for daily Ether ETF subscriptions.

$2 Billion Silk Road Bitcoin Moved To Coinbase

This month, there’s been a significant rise in the number of options for Bitcoin that provide downside protection, especially for later expiration dates in the options market. On the other hand, Bitcoin futures have shown a moderate level of leverage and have remained somewhat calm following Bitcoin reaching over $99,000.

As per Vetle Lunde, who leads research at K33, it appears that traders who bought Bitcoin between $55,000 and $70,000 are now cashing in their gains. Lunde noted that this profit-taking has been particularly noticeable when Bitcoin trades above $90,000.

Jake Ostrovskis, an employee at Wintermute OTC, noticed that the market has slowed down for the past ten days since Bitcoin is hovering just below $100,000. The volatility of Bitcoin has decreased slightly, with it being in the 64th percentile, while Ether’s volatility is significantly higher at the 81st percentile.

This decrease in volatility indicates a sense of caution among traders as they evaluate the market’s upcoming direction. There is a possibility that the current Bitcoin price movement may revisit lower support levels, which could pose a threat to the goal of reaching $100,000 by year-end.

Newly disclosed information, published by NewsBTC on Monday, contributes to market volatility as it suggests that approximately $2 billion in Bitcoin, once seized from the Silk Road marketplace by U.S. authorities, has been transferred from government wallets to Coinbase.

Actions like these frequently provoke discussions amongst investors, as comparable actions taken by the U.S. administration to significantly offload their assets led to a decline during the second and third quarters of the year, with Bitcoin dropping more than 20% in two successive months.

At the time of writing, BTC is trading at $94,480, down 0.5% over the past 24 hours.

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2024-12-04 11:10