Key conclusions:
- Bitcoin derivatives are showing limited conviction among professional traders, but ETF flows and strategies could play a role in the next big rally.
- Diminished prospects for a peace plan between the US and Iran and high oil prices could prevent Bitcoin’s price discovery.
Bitcoin (BTC) flirted with the $82,000 level on Monday, sparking a brief surge in bullish bullish demand. Bitcoin has held close to $80,000 for more than a week, prompting many traders to bet on further growth. However, derived metrics show that professional players remain skeptical, leaving many to wonder if $85,000 is actually within reach.
Bitcoin perpetual futures annual funding rate. Source: Easiness
The annual funding rate for Bitcoin perpetual futures briefly jumped to 6% on Monday, touching neutral to bullish territory for the first time in over a month. However, the indicator remained largely negative, signaling greater demand for bearish leverage. This lack of confidence among bulls may not necessarily block further gains, but it does highlight a cautious mood among traders.
Daily net flows of US-listed Bitcoin spot ETFs, USD. Source: SoSoValue
Outflows from US-listed spot Bitcoin ETFs on Thursday and Friday likely fueled this bearish sentiment. Since ETF flows are a proxy for institutional interest, seeing a real reversal as Bitcoin failed to break $82,000 in several attempts is causing real concern across the market.
Bitcoin Miners Turn to AI, BTC Price Remains Stable
The artificial intelligence sector continues to capture the attention of investors, especially after several Bitcoin mining companies have pivoted high performance computing. Iren (IREN US) announced a major deal with Nvidia worth $34 billion on Friday. In addition, Core Scientific (CORZ US) recently announced plans to expand its campus in Muskogee, Oklahoma.
Bitcoin’s hashrate fell to an eight-week low on April 26, but the indicator showed plenty of resilience throughout May.
Bitcoin 7-day average hashrate, exahashes per second. Source: Blockchain.com
The estimated processing power supporting the Bitcoin network has increased by 5% in just two weeks, reaching 970 exahashes per second. While this is still far from the peak of 1,150 exahashes per second, the fear of miners leaving the network due to AI has proven to be irrational.
Despite this, the bullish momentum has not fully returned for traders, as Bitcoin remains 35% below its all-time high.
Bitcoin 30-day delta skew options (put-call) on Deribit. Source: Laevitas
The delta skew (put-call) of Bitcoin options was 10% on Monday, unchanged from the previous week. Put (put) options are trading at a premium, hinting that whales and market makers are currently not comfortable holding downside risk. Whether the main issue is the economy or geopolitics, professional traders clearly fear a correction.
Related: Bitcoin Stalls As BTC ETF Outflows Hit $268M–Will New Fed Chair Revive Rise?
Outside of crypto, Brent crude oil prices jumped above $105 on Monday as the Strait of Hormuz remains partially closed due to the war in Iran. US President Donald Trump called Iran’s latest demands “completely unacceptable”, while Israeli Prime Minister Benjamin Netanyahu insisted the conflict would not end until Iran’s stockpile of enriched uranium was “taken out”.
As for the corporate BTC treasury, Strategy (MSTR US) has announced that it has taken over $43 million in Bitcoin after a one-week break. The purchase was financed by the sale of company shares. So while the derivatives market still feels a bit bearish, the path to $85,000 is still wide open. Any new inflows into Bitcoin spot ETFs this week could easily be the catalyst the market needs.
