Bitcoin excited investors by exceeding $ 59,000 for the first time since December 2021. Behind this rise are factors such as increasing institutional demand, the upcoming halving event and spot Bitcoin ETF inflows. However, despite bullish expectations among investors, some investors are also looking for protection against a possible pullback. At this point, it is noteworthy that large investors, called “whales”, buy put options below $ 50,000. Here is the critical Bitcoin prediction
Bitcoin forecast left traders discouraged
Bitcoin excited investors and analysts by exceeding $59,000 for the first time since December 2021. While there is an expectation that BTC will exceed its $69,000 ATH, some investors are also looking for protection against a possible pullback. The factors behind the rise are:
- Increasing corporate demand: Institutional investors such as Grayscale Investments continue to increase their investments in Bitcoin. This contributes to the rise in BTC price.
- Upcoming halving event: The halving event, which divides the circulating supply of Bitcoin in two, will take place in 2024. This will increase the scarcity of BTC and therefore its price.
- Spot Bitcoin ETF entries: Recently there has been increased interest in ETFs to invest in Bitcoin. This is a factor that affects the BTC price upwards.
Why is it important for whales to buy put options?
A put option gives the buyer the right to sell the asset at a predetermined price on or before a certain date. This helps protect investors against possible declines. Large investors, called “whales,” are buying put options below $50,000 to hedge spot Bitcoin profits. This ensures that they are protected against a possible drop in BTC price.
For example, a whale bought 1 Bitcoin for $59,000. If he thinks the BTC price will fall, he can buy a $50,000 put option. This option gives him the right to sell Bitcoin at $50,000. If BTC price falls below $50,000, he can protect his profit by exercising the whale option.
Funding rates and risk
Funding rates are the interest rates paid by buyers to sellers in futures contracts. A rise in funding rates could indicate an overheated market. This could lead to a correction in BTC price. Investors also need to be aware of the potential risks when investing in Bitcoin. BTC price is highly volatile and may experience sudden declines.
It remains unclear in which direction the Bitcoin price will move in the coming period. Analysts expect BTC to surpass $60,000 and move towards the ATH. However, investors need to be prepared for a possible pullback.
In summary, Bitcoin exceeded $59,000. cryptokoin.com As we reported, analysts expect progress towards ATH. But whales are buying put options to hedge against a possible pullback. This strategy could help stabilize the market if the BTC price falls below $50,000. It is important for investors to consider funding rates and risks of Bitcoin.
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