- Bitcoin rebounded 4.5% since Saturday and is close to its mid-July high of $122,838.
- Open interest in Bitcoin derivatives increased, signaling more leveraged long bets.
- Traders are watching the upcoming U.S. Consumer Price Index (CPI) for clues about possible Federal Reserve rate cuts.
- Experts say Bitcoin could reach $150,000 by the end of the year if current conditions continue.
- Some investors are buying defensive options due to concerns over a possible spike in inflation.
Bitcoin prices have risen 4.5% since Saturday, nearly matching the all-time high of $122,838 set in mid-July, according to CoinGecko data. This uptick comes as traders focus on Tuesday’s U.S. Consumer Price Index (CPI) release, which may influence Federal Reserve policy.
Open interest in Bitcoin derivatives climbed by 7,834 BTC as reported by derivatives platform Coinalyze, with trading volumes in both spot and perpetual contracts increasing. The rise appears to come mainly from traders betting on Bitcoin’s price going up, known as leveraged long positions.
Sean Dawson, head of research at on-chain options platform Dervie, said in an interview with Decrypt that current market conditions could push Bitcoin to “$150,000 before the end of the year,” based on volatility data. He also stated, “There’s still plenty of fuel left for this bull run.”
Recent gains in technology stocks, including those in the NASDAQ, have coincided with increased optimism about possible U.S. rate cuts and a weaker U.S. dollar. The correlation between NASDAQ and Bitcoin is helping to drive Bitcoin’s recent price movements, as noted by crypto intelligence newsletter Ecoinometrics, which stated: “Bitcoin may be digital Gold, but it trades like a risk-on asset. What really matters is whether markets are in a risk-on or risk-off regime.”
Markets are closely watching Tuesday’s CPI report. Economists expect annual inflation to rise 0.1 percentage points to 2.8%. If the report shows softer inflation, it could increase expectations for a Fed rate cut as soon as September. Dawson explained, “Crypto typically performs very well in low-rate environment conditions.”
However, Dawson noted that some traders are buying more put options, which act as a form of downside protection. This indicates concern about higher-than-expected inflation, which could lead to what he called a “mini panic” and a sharp downturn in the market.
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