Bitcoin Traders Refuse to YOLO After BTC Nears $110K – Why Wait?

Bitcoin (BTC) hit an all-time high of $109,321 on January 20 amid expectations for a more crypto-friendly administration under US President Donald Trump. The optimism stems from the campaign's hopes for regulatory transparency and the appointment of pro-crypto figures to key positions.

Bitcoin derivatives show moderate risk appetite from bulls

Despite the price increase, the sentiment among Bitcoin well and market makers remained calm. According to derivatives data, there was little confidence in an additional profit of more than $110,000, at least in the short term.

On January 20, the Bitcoin futures premium against spot markets rose to 14%, from 12% on January 17. Although this figure exceeds the neutral limit of 10%, it shows some skepticism among professional traders. Historically, bullish rallies have pushed BTC futures premiums over 30 percent.

To assess whether this effect is limited to futures markets, analysts also examine the volatility scale of BTC options. This indicator compares the same call (buy) and put (sell) options. Ratios between -6% and +6% are considered neutral, while a negative skew indicates bullishness.

Currently, the Bitcoin options on Deribit stands at 25% delta skew -6%, which indicates cautious optimism. This suggests that the BTC derivatives markets are not showing signs of overconfidence, although this does not necessarily indicate pessimism.

Is Trump's Inauguration a “Sell the News” Event for Bitcoin?

After hitting a record high, the price of bitcoin fell below $105,000, leading traders to speculate that Trump's inauguration represented a “sell the news” scenario. Many expected measures to support the crypto market have already been announced, reducing the element of surprise. Additionally, the “Strategic Bitcoin Reserve” plan is dependent on Congressional and Senate approval, making its implementation uncertain.

Part of Bitcoin investors' lack of enthusiasm and price correction is because uncertainty over the revolving US fiscal debt situation has caused investors to tread cautiously.

The U.S. federal budget deficit for the first quarter of fiscal 2025 rose nearly 40 percent from the same period last year, according to the Treasury Department. Additionally, market forecasts estimate that government debt financing costs will exceed $1.2 trillion by 2025, surpassing last year's record.

RELATED: Bitcoin Hits New All-Time High Above $109K Ahead of Trump Inauguration

In a Jan. 17 letter to congressional leaders, US Treasury Secretary Janet Yellen warned that the federal government will reach the borrowing limit on Jan. 21. She announced plans to employ “extraordinary measures” to temporarily free up borrowing capacity under the $36.1 trillion debt. Ceiling, eliminating potential default.

Failure by lawmakers to reach a fiscal deal in the coming days could lead to a partial government shutdown, disrupting essential services, delaying federal worker pay and destabilizing financial markets. This uncertainty has increased traders' incentive to protect profits, especially after Bitcoin's price posted a 17% year-to-date gain above $109,000.

While professional traders remain wary of further Bitcoin price rises, there are no signs of bearish betting on the rise. Data indicates that most traders are either standing on the sidelines or positioning themselves for further sideways price action. However, the continued rise in Bitcoin prices could catch whales and market makers off guard, especially in the US with a more crypto-friendly regulatory environment.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.