Bitcoin price rallies above $97K as institutional and retail traders’ appetites shrink

Bitcoin (BTC) briefly dipped below $95,000 on Feb. 9 after reports emerged that China would impose tariffs on energy imports from the United States, including crude oil and liquefied natural gas. Despite the initial negative reaction, Bitcoin regained the $97,000 support level on Feb. 10 after US President Donald Trump responded with a 25% tariff on steel and aluminum imports.

However, institutional demand for Bitcoin has shown little change in recent days. Key indicators, including spot exchange-traded fund (ETF) flows and BTC derivatives metrics, suggest limited buying interest.

The 25% delta skew for Bitcoin options, which compares similar put (sell) and call (buy) options, is a relevant measure of market sentiment. In bullish conditions, put options trade at a discount, pushing the indicator below -5%. Currently, it stands at 2%, a neutral level but weaker than the -5% observed on Feb. 1. Similarly, demand for leveraged long positions in Bitcoin futures is near its lowest level in four months.

The current 8% annualized premium on Bitcoin futures is significantly below the 11% recorded on Feb. 1 and remains under the 10% bullish threshold. This suggests that institutional traders’ appetite for leveraged Bitcoin exposure is well below historical averages.

Macroeconomic factors drive concerns, not Bitcoin-specific issues

Aside from aggressive buying by US-listed company Strategy (formerly MicroStrategy), spot Bitcoin ETFs in the US saw modest inflows of just $204 million between Feb. 3 and Feb. 7. To put this into perspective, Strategy disclosed a $742.3 million Bitcoin purchase between Feb. 3 and Feb. 9, as per a US Securities and Exchange Commission filing released on Feb. 10.

Data indicating that institutional demand for Bitcoin remains relatively low at $97,000 is consistent across various metrics. However, the primary concern appears to stem from the broader macroeconomic environment rather than factors specific to cryptocurrencies. 

Yields on the US 10-year Treasury have declined to 4.50% from 4.78% a month earlier as traders moved toward safer assets. A lower US Treasury yield signals investor risk aversion as demand for the asset deemed the most safe rises. This pushes bond prices up and yields down, reflecting concerns over economic uncertainty and market volatility.

US President Trump has begun his second term with an aggressive trade policy, weighing on risk on markets, including Bitcoin. Investors are increasingly concerned that escalating tariffs could slow global economic growth. Reflecting the inflationary impact of higher trade barriers, financial markets have adjusted expectations for near-term US Federal Reserve interest rate cuts, adopting a more cautious stance.

Adding to risk aversion on Feb. 10, Moody’s issued a warning that the World Bank could lose its AAA credit rating if major multilateral lenders reduce support following the US government’s decision to reassess its funding for development banks.

Meanwhile, McDonald’s reported a 1.4% year-over-year decline in US sales for the fourth quarter, raising concerns about economic resilience. This uncertainty has driven investors toward cash positions, strengthening the US dollar against other major currencies. The US Dollar Index (DXY) surged to 108.30 on Feb. 10, up from 107.60 on Feb. 7.

While Bitcoin struggled to break above $98,000 on Feb. 10, this does not preclude a rally beyond $100,000, particularly given the more favorable regulatory landscape. Several US states are introducing legislation to establish Bitcoin reserves, fueling speculation about a potential global accumulation race.

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.