Bitcoin [BTC] has been hovering around the $90,000 mark for some time now, with sustained high market interest, pushing it into an ‘extreme greed’ territory as per the Crypto Fear and Greed Index (FGI).
Based on data from Soso Value, this recent surge marked the fifth instance of FGI signaling ‘extreme greed’ (above 80) since 2021.
Looking back at historical patterns, an FGI reading above 80 has historically aligned with local and cycle peaks for BTC. For instance, in early 2024, BTC reached a local peak surpassing $73,000 during a period of ‘extreme greed’ status.
A similar scenario unfolded in 2021, where a comparable signal corresponded with a local peak in February, preceding a cycle peak in August.
The looming question now is whether this pattern will repeat, potentially prompting a price retracement. Despite the optimism prevailing in the options market, conflicting opinions emerged until BTC hits the $100,000 milestone.
BTC options traders have their sights set on targets between $95,000 and $110,000
According to the latest insights shared by Deribit, prominent players in the options market have taken a bullish stance by shedding bearish positions in the form of $75,000 and $85,000 puts, while ramping up their bullish bets through $95,000 to $110,000 calls.
A snippet from Deribit’s update highlighted,
“Shifting focus from November $84,000 calls to December $90,000 calls. Early buying observed for November $90,000 and December $95,000 calls. Trading activity noted for both November and December $100,000 calls. Subsequent reduction in December $75,000 and $80,000 puts, $90,000 calls, and straddles. Increased buying activity seen across December and March $110,000 call spreads. Overall sentiment leans towards a bullish bias.”
In essence, most hedge funds are not anticipating BTC to dip below $80,000 or $75,000, as evidenced by the selling of December $75,000 and $80,000 puts.
Conversely, they are anticipating a continued rally with potential price objectives in the range of $95,000 to $110,000 by December and early 2025.
The same price targets align with BTC’s 2-week chart, highlighting key upside goals at $95,800 and $102,000.
Given the current price momentum and the Stochastic RSI inching towards the overbought region, BTC might make a push towards these targets.
Yet, a notable resurgence in retail participation signals a probable local or cycle peak, often utilized by whales to exit positions.
Nonetheless, Ki Young Ju, the founder of CryptoQuant, warned about a potential price correction but opined that it might not signify the onset of a bear market. He remarked,
“As a major player, waiting for more exit opportunities would be prudent. The journey is just commencing. Picture retail entering in FOMO mode at $100,000. While corrections may occur, they may not herald the start of a bearish market, from my perspective.”