Bitcoin Faithful Still Missing Even After Token Reclaims $90,000

Core Viewpoint - Bitcoin has reclaimed the $90,000 level, but the underlying market conditions remain fragile, with traders adopting a defensive stance [1]. Market Sentiment - There are few signs of sustained optimism in crypto derivatives markets despite Bitcoin's recent price rebound [1]. - Most bets in Bitcoin perpetual and dated futures are concentrated in short-term contracts, indicating muted demand for longer-dated futures on the Chicago Mercantile Exchange, which is a key indicator of institutional interest [2]. Research Insights - Vetle Lunde from K33 Research noted that while morale is improving, overall sentiment remains cautious and hands-off despite the recent uptrend [3]. - Spot volumes, volatility, and derivatives leverage are near pre-December lows, with 86% of open interest in front-month expiry contracts, suggesting limited bullish positioning [4]. Price Movements - Bitcoin's price dropped 6.5% to $87,648 last year and was down about 1% to $92,107 as of early Wednesday [5]. - The first few trading days of the year saw a reversal of persistent selling, with significant inflows into Bitcoin ETFs marking the strongest single-day net inflow since October 7 [5]. Future Activity - Further gains in Bitcoin could stimulate activity in CME futures contracts, as the basis trade becomes attractive again [6]. Comparative Analysis - Bitcoin's relative stagnation compared to gold and equities raises questions about its value as an asset class, with declining volatility suggesting that the best performance days for cryptoassets may be behind [7].