Bitcoin climbed as high as $87,300 after smashing through the key $82,000 resistance level, BlockBeats reported. That jump wiped out roughly $750 million in bearish crypto derivatives positions, and short covering added more fuel to the move.
Since that breakout, open interest in Bitcoin derivatives has grown by about $2 billion, a sign leverage is rushing back into the market. Nansen analyst Nicolai Sondergaard said, "Prices turned bullish faster than positioning could adjust."
ETF flows and holder cost basis move back into focus
U.S. spot BTC ETFs had earlier posted combined outflows of $746 million on Tuesday and Wednesday after the CLARITY Act was blocked and the Federal Reserve raised rates, the report said. But flows flipped back into the green: $160 million in inflows on Thursday, then $433 million on Friday.
The report estimated the average cost basis of U.S. BTC ETF holders at about $82,200. So with Bitcoin back above that mark, ETF investors as a group are in profit again.
Analysts point to $87,000, $90,000 and about $92,000
As for the next levels on the chart, Sondergaard said $87,000 is the next big area to watch, then $90,000 and around $92,000. Wintermute trader Jasper De Maere also said BTC could test $90,000.
At the same time, De Maere said a break above the 50-week moving average is only a positive signal. Not more than that. He also warned that big short-term swings are still on the table. The market is now watching whether spot buying and ETF inflows can keep backing the move.
What traders are watching as leverage builds
Sondergaard warned that if spot demand does not keep up with the rise in derivatives leverage, the rally could turn into a leverage-led move and snap back fast if U.S. Treasury yields rise or geopolitical shocks hit the market.
Wintermute said traders should keep an eye on ETF flows over the next few days, open interest and funding rates in perpetual futures, and this Friday's options expiry.