Bitcoin Hits 3-Week High, But Traders Remain Cautious

Bitcoin's price jumped above $90,000 on Saturday, reaching a three-week high. However, derivatives and spot ETF flows indicate that traders are not confident in further upside for now.

Bitcoin's Price Movement

Bitcoin rose above $90,000, but options data show traders are not comfortable with downside risk exposure. The S&P 500 traded just 1.3% below its all-time high, while investors grew concerned about worsening economic conditions.

The tech-heavy Nasdaq index futures failed to reclaim the 26,000 level, as the sector remains torn between optimism around artificial intelligence and risks tied to weaker US job market data. Tesla's total vehicle deliveries reached 418,227 units in the fourth quarter, down 15% from 495,570 a year earlier.

Market Sentiment

Demand for leveraged BTC bullish positions remained flat on Saturday, even as Bitcoin rebounded to its highest levels since Dec. 12. The Bitcoin futures basis rate stood below the neutral threshold on Friday, signalling a lack of confidence among bulls.

The current 4% annualized premium over spot markets reflects traders’ concerns that US import tariffs could weigh on the broader economy. The lack of demand for leveraged bullish Bitcoin positions can also be linked to selling pressure in Bitcoin spot exchange-traded funds (ETFs).

Economic Concerns

Inflation remains a major source of concern as the US government plans to roll out tax incentives to stimulate the economy. Bond futures markets are pricing just a 16% probability that interest rates will fall to 3.25% or lower by April.

Conclusion

For now, Bitcoin derivatives traders do not expect further price gains, and confidence is likely to rebuild slowly following a month-long consolidation near $89,000. The market remains cautious, with traders waiting for a clearer direction before making their next move.