Is BTC Price Heading To $85K?

Bitcoin (BTC) bulls worry that soft demand for BTC futures is weakening institutional demand. However, other indicators suggest that the price of BTC may not fall below $85,000.

Main Receptors:

BTC futures open interest fell to $42B, an eighth-month low, indicating leverage over bearish bets.

Bitcoin options price stability suggests sentiment.

BTC futures open interest is at an eight-month low.

After briefly testing the $89,000 level on Friday, Bitcoin faced another rejection. This move has left traders off guard with more than $260 million in leveraged BTC futures positions.

Total BTC futures open interest on major exchanges fell to $42 billion from $47 billion two weeks ago, marking the lowest level in eight months. Still, the mighty sharp drop isn't inherently boring, as longs and shorts always match.

Investor uncertainty worsened after a total of $825 million flowed out of the spot Bitcoin ETFs over five days. While that's less than 1% of the $116 billion in deposits, traders worry that the bullish momentum seen in October may have faded amid global economic uncertainty.

Precious metals rise in economic uncertainty

Gold and silver climbed to new all-time highs on Friday as investors sought to hedge against rising U.S. debt.

Demand for government-backed debt rose, pushing the yield on the US 10-year Treasury to a three-week low of 4.12%. Part of the uncertainty over US monetary policy stems from inconsistent signals around import tariffs.

President Donald Trump's administration announced Tuesday that tariffs on Chinese semiconductor imports have been extended until June 2027.

Last week, the US government lifted a ban on shipments of Nvidia's second-most powerful artificial intelligence chips to China, previously imposed by the Joe Biden administration over national security concerns, Reuters reported.

Bitcoin base rate is back

Bitcoin's monthly futures premium helps assess whether market makers have turned bearish. Under neutral conditions, BTC futures trade at an annual premium of 5% to 10%, known as the base rate, to compensate for the longer settlement period.

Given Bitcoin's repeated failures to reclaim the $90,000 level since October 12, some pessimism should be expected, namely a lower base.

But the base rate for bitcoin futures stood at 5% on Friday, unchanged from last week. While somewhat subdued, the metric is far from the sub-4% levels seen on December 18, when Bitcoin traded below $85,000.

Meanwhile, the Bitcoin options market helps whales and market makers decide whether to expect further declines.

Delta skew measures the value of put (sell) options relative to call (call) instruments. As sentiment weakens, the gauge rises above the neutral 6% threshold, while bullish levels typically push into negative territory.

Investors are concerned that even when signs of soft economic activity come, Bitcoin will continue to behave as a high-risk asset, while precious metals have rallied.

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However, a decline in BTC futures and open interest options, along with a net outflow of Bitcoin ETFs of about 1%, does not in itself indicate a sustained bear market, especially when Bitcoin options benchmarks and the base rate remain healthy.

Despite a possible retest of the $85,000 support level, the bulls seem to be slowly regaining their confidence, although Bitcoin is unlikely to break above $90,000 in the near future.

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