FameEX Hot Topics | Bitcoin Sells Off, Yet BTC Derivatives Indicate $150K by Year-End

Bitcoin experienced a correction on Tuesday after hitting an all-time high of $126,219 the previous day. This pullback was expected, especially after a strong 12.5% gain over the past week. Although there are concerns about a deeper retracement amid growing global economic uncertainties, Bitcoin’s derivatives data and institutional flows suggest the potential for further upside. The recent rally was driven by a combination of record inflows into Bitcoin exchange-traded funds (ETFs), tightening supply on exchanges, and robust derivatives activity, all of which indicate continued institutional demand for Bitcoin and suggest there is room for further price increases.

Currently, Bitcoin monthly futures are trading at an 8% annualized premium over spot markets, which falls within the neutral range of 5% to 10%. Historically, during periods of strong market confidence, this premium has risen above 20%, indicating heightened demand for leveraged bullish positions. Conversely, during bearish phases, the premium typically drops below 5% or even turns negative. The current premium suggests that while there is no overwhelming market exuberance, demand remains healthy, indicating potential for future price gains.

At first glance, the relative lack of confidence among derivative traders may appear bearish, but in reality, it reduces the risk of cascading liquidations if Bitcoin’s price experiences a deeper pullback. Additionally, data indicates that the rally following Bitcoin’s retest of the $109,000 mark on September 26 was driven by real capital inflows, rather than speculative activity. As long as Bitcoin holds above the $120,000 level, the conviction of bullish investors is expected to grow stronger, suggesting a continued positive outlook for Bitcoin’s long-term prospects.

Institutional adoption of Bitcoin is also on the rise, reinforcing its position as digital gold. Despite short-term price fluctuations, Bitcoin has gained 31% year-to-date in 2025, significantly outpacing the S&P 500, which has increased by 14%. Net inflows into Bitcoin products, including ETFs, provide a strong indication of institutional interest. Recently, Bitcoin exchange-traded products saw $3.55 billion in weekly net inflows, pushing total assets under management to $195.2 billion. This further underscores the growing institutional involvement in Bitcoin.

Bitcoin’s supply dynamics are also shifting. Deposits on exchanges have dropped to their lowest levels in over five years, signaling a reduced supply available for immediate sale. Exchange balances have fallen from 2.99 million BTC to 2.38 million BTC in just one month, highlighting ongoing accumulation. With Bitcoin futures open interest standing at $72 billion, the market remains deep and liquid, attracting flows from hedge funds and asset allocators. While short-term consolidation remains possible, the strength of Bitcoin’s derivatives market and continued institutional support point toward the possibility of a price surge, with bullish traders targeting $150,000 or more by year-end.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.