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Bitcoin's rally to $109K coincides with eurozone monetary expansion and weak US labor data.
Futures premium and ETF outflows suggest pro traders aren’t confident in a breakout.
USDT discount in China and flat options skew reflect subdued crypto demand and indecision.
Bitcoin (BTC) climbed to $109,750, trading just around 2% below its all-time high, after retesting the $105,137 support level earlier on 2nd July. The rally coincided with fresh data showing record monetary expansion in the eurozone and slower U.S. labor growth, suggesting ample liquidity is still fueling asset prices.
Yet, market dynamics and trader behavior reveal growing uncertainty among professional investors.
Bitcoin (BTC) climbed to $109,750, trading just around 2% below its all-time high, after retesting the $105,137 support level earlier on 2nd July. The rally coincided with fresh data showing record monetary expansion in the eurozone and slower U.S. labor growth, suggesting ample liquidity is still fueling asset prices.
Yet, market dynamics and trader behavior reveal growing uncertainty among professional investors.
As an indicator of institutional optimism, the Bitcoin futures premium, which measures the price difference between fiat currency paid for BTC in future contracts versus spot, was lower than the 5% neutral position on July 2.
In healthy bull markets, futures premiums often exceed 5%, signaling aggressive long bets. That this indicator stayed subdued suggests traders are cautious and not fully betting on sustained gains.
This has been the case since mid-June when the futures premium last approached the neutral position in Bitcoin’s last attempt above $110K. Moreover, the lack of demand for leveraged long positions shows there is little conviction in the price strength.
Several economic signals helped lift BTC today:
Eurozone M2 money supply rose 2.7% year-over-year in April, marking a record high and aligning with continued monetary easing in the US.
In the U.S., ADP private payrolls declined by 33,000 in June, indicating labor softness and shifting expectations for continued rate cuts or policy support.
Renewed U.S.-Japan tariff threats have raised global trade war fears, as President Trump has threatened to hike tariffs above 30% if no deal is reached by July 9.
Meanwhile, EU diplomats are pressuring Trade Commissioner Sefcovic to take a tougher stance amid internal divisions over retaliation. This political friction exacerbates macroeconomic concerns regarding equity and cryptocurrency markets.
On the derivatives side, the 25% delta skew, which allocates a premium between bearish puts and bullish calls, remains at 0%, unchanged from two days prior. A skew above +6% typically indicates a strong demand for protection via puts amid anticipated drops.
That it's flat at zero suggests traders see a balanced risk profile, lacking conviction in either direction. This neutral sentiment marks a slight improvement over late June, but it remains overall tepid.
Also Read: Is Bitcoin Getting Ready for a Big Price Move in July?
China’s Tether (USDT) has dropped to a 1% discount versus the official U.S. dollar rate, the biggest since mid-May. This discount typically reflects capital outflows from crypto as investors reduce exposure.
In bullish conditions, stablecoin demand tends to push pricing above the peg. The current discount indicates weakening confidence in Bitcoin’s recent gains among Chinese retail and institutional actors.
Investor optimism may have fueled recent gains, but capital flows tell a different story. On July 1, spot Bitcoin ETFs recorded net outflows of $342 million, suggesting that institutional participants were withdrawing liquidity at a crucial moment.
This withdrawal mirrors the caution seen in derivatives and stablecoin data, underscoring that professional investors remain cautious about assigning new capital to BTC at this level.
Also Read: Why Bitcoin Could Soar to $136,000 This July: 3 Key Catalysts
Options market data indicate that the 7-day implied volatility for BTC has decreased to approximately 27%, one of the lowest levels since October 2023. This contraction suggests reduced expectations of sharp price swings.
Futures implied yields and funding rates are currently edging toward the lower end of their weekly range, consistent with reduced speculation and institutional risk appetite.
At this point, Bitcoin’s path to a clear breakout above $ 110,000 hinges on further macroeconomic data points, fresh ETF inflows, or a realignment in derivatives positioning. Until then, retail buying may drive the spot price upward, but professional conviction appears to be lagging.
Bitcoin's rise above $109,000 is fueled by macroeconomic liquidity, recession fears, and diminishing risk premiums. However, the sentiment from pro traders remains tepid, as reflected in:
A futures premium that is still low beneath bullish levels
Neutral options delta skew that reflects an indecisive mood
A significant Tether discount in China implies weak demand for crypto
ETF outflows from institutions as sentiment shifts
At this point, Bitcoin's pathway to a solid breakout above $ 110,000 depends on further macroeconomic data points, new ETF inflows, or a change in derivatives positioning. Until then, retail spot buying may drive the price, but it appears that professional investors lack conviction.
These signals suggest that while Bitcoin is rallying, professional confidence remains subdued, and that makes the rally appear fragile until more decisive catalysts emerge.
Why are pro traders cautious despite BTC hitting $109K?
Because futures premiums remain below bullish levels, signaling a lack of leveraged confidence.
What does a 0% delta skew in options mean?
It shows traders see equal risk up or down, indicating neutral sentiment.
Why is the USDT discount in China relevant?
It reflects reduced demand for crypto, signaling fear or exit pressure in Asian markets.
What role did macroeconomic factors play in the rally?
Liquidity expansion in the eurozone and weak US payrolls fueled market optimism.
Are ETF outflows a bearish signal?
Yes, they suggest institutional investors are pulling back despite BTC’s price rise.
