FameEX Hot Topics | Bitcoin Pulls Back, But BTC Derivatives Suggest $150K by Year-End

Bitcoin experienced a correction on Tuesday, following a record high of $126,219 the previous day. This pullback was somewhat anticipated after a 12.5% weekly gain. Despite concerns about a deeper retracement due to growing global economic uncertainties, Bitcoin’s derivatives data and institutional flows indicate the potential for further upside. The rally was fueled by a combination of record ETF inflows, a tightening supply on exchanges, and strong derivatives activity, all highlighting continued institutional demand for Bitcoin and signaling room for future price increases.

Monthly Bitcoin futures are currently trading at an 8% annualized premium compared to spot markets, which remains within the neutral 5% to 10% range. Historically, periods of excessive market confidence have pushed this premium above 20%, indicating stronger demand for leveraged bullish positions. On the other hand, during bearish phases, the premium often drops below 5% or even turns negative. The current range signals that while market sentiment is not overly exuberant, it is still healthy, suggesting ongoing demand and potential for future price gains.

Though derivative traders' relative lack of confidence might seem bearish at first glance, it actually mitigates the risk of cascading liquidations if Bitcoin’s price faces a deeper pullback. Data suggests that the rally that began after Bitcoin tested the $109,000 mark on September 26 was fueled by genuine inflows rather than speculative trading. As long as Bitcoin maintains its position above $120,000, the conviction of bullish investors continues to grow stronger, signaling confidence in Bitcoin’s long-term prospects.

Institutional adoption of Bitcoin continues to strengthen, reinforcing its position as digital gold. Despite any short-term price fluctuations, Bitcoin has already gained 31% year-to-date in 2025, significantly outperforming the S&P 500, which has increased by 14%. Net inflows into Bitcoin products, including ETFs, serve as a strong indicator of institutional interest. Recently, Bitcoin exchange-traded products saw $3.55 billion in weekly net inflows, bringing the total assets under management to $195.2 billion. This figure highlights the growing institutional involvement in the Bitcoin market.

Additionally, Bitcoin’s supply dynamics are evolving. Deposits on exchanges have dropped to their lowest levels in over five years, indicating a reduced supply available for immediate sale. This decline in exchange balances, which have fallen from 2.99 million BTC to 2.38 million BTC in just one month, signals that accumulation is still ongoing. With Bitcoin futures open interest at $72 billion, a deep and liquid derivatives market continues to attract 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 to a potential surge in price, with bullish traders targeting $150,000 or more by the end of the year.

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