Bitcoin comes back to life — Does data support a rally to $100K and higher?

Bitcoin (BTC) reached $99,500 on Feb. 21, its highest level in two weeks, but failed to maintain the bullish momentum. This move can be partly attributed to a lack of enthusiasm in Bitcoin’s derivatives markets. Traders have been reluctant to open bullish positions since the rejection at $102,000 on Feb. 3.

The Bitcoin futures premium typically fluctuates between 5% and 10% in neutral markets, compensating for the longer settlement period. However, this indicator has not shown bullish momentum since Feb. 3, and the recent ris

e from $95,500 on Feb. 19 to $99,500 on Feb. 21 was insufficient to break the trend.

Bitcoin price surged briefly due to China’s adjusted M1 supply data

Investor optimism was briefly sparked by a surprising increase in China’s broad M1 monetary supply data, which showed a significant jump in January. However, this movement was misinterpreted, as the methodology was adjusted to include individual checking accounts and holdings in non-bank payment platforms such as Alipay and WeChat Pay.

Credit growth in China accelerated, with data released on Feb. 14 showing new loans from financial institutions rising by $702 billion in January, the highest level since 1992. Michelle Lam, Greater China economist at Societe Generale, stated that the latest data “suggests policymakers are adding fuel to the economy,” according to Yahoo Finance.

To assess whether the recent Bitcoin price gains have influenced the sentiment of whales and market makers, it is essential to analyze the BTC options markets. If traders anticipate a correction, put (sell) options will trade at a premium, pushing the 25% delta skew metric above 6%. Conversely, periods of bullishness cause the indicator to move below -6%.

The Bitcoin options market showed little excitement over the recent $99,500 retest, as the 25% delta skew indicator remained at 5%, within the neutral range. Notably, the last instance of bullishness, based on this metric, occurred on Jan. 26, when Bitcoin’s price approached $105,000.

To gain a broader understanding of cryptocurrency demand, one can look at the stablecoin market. Typically, strong interest in cryptocurrencies in China causes stablecoins to trade at a premium of 2% or more above the official US dollar rate. In contrast, a discount often indicates fear as traders rush to exit the crypto markets.

The USDT premium in China has remained close to 0.5% for the past week, within the neutral range. Similar to other Bitcoin derivatives metrics, the last time stablecoins traded at a 2% premium in China was on Feb. 3, indicating that traders were largely unfazed by the recent price movement toward $100,000.

Mixed emotions following President Trump’s cabinet picks

Traders’ reduced demand reflects two consecutive weeks of failed attempts to maintain levels above $98,000, along with some disappointment over President Trump’s crypto council, which has reportedly been canceled as the administration chose to hold informal summits instead. Similarly, there has been excessive hype around the potential creation of a strategic Bitcoin reserve.

On a positive note, the US Securities and Exchange Commission announced its intention to drop charges against Coinbase, signaling a favorable regulatory environment. Additionally, Howard Lutnick, former CEO of Cantor Fitzgerald, was confirmed as the US Secretary of Commerce. Lutnick is a vocal Bitcoin supporter, which boosts traders’ hopes for accelerated institutional adoption.

Despite the relatively low interest in Bitcoin, a constructive scenario for an all-time high remains in place as investors gradually recognize the cryptocurrency’s hedge against inflation and censorship-resistant qualities.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.