Bitcoin (BTC) experienced a surprising 7% correction on Jan. 27, briefly dropping below $98,000 for the first time in over 10 days. Regardless of the factors driving this movement, Bitcoin’s price is struggling to reclaim the $100,000 support level, prompting traders to question whether the bullish momentum has dissipated.
Bitcoin derivatives metrics remained stable despite the $7,320 price drop to $97,754, suggesting that whales and arbitrage desks were prepared for the downturn. However, stablecoin metrics from Chinese markets indicate that cryptocurrency demand in the region remains subdued.
Bitcoin futures and options markets displayed resilience
The Bitcoin futures annualized premium, which measures how monthly contracts trade relative to the spot market, provides a key insight into leverage demand. Premium levels between 5% and 10% are considered neutral, while values above this range reflect optimism.
Bitcoin futures 2-month annualized premium. Source: Laevitas.ch
Despite Bitcoin’s temporary dip to its lowest level in 10 days, the BTC futures premium consistently stayed above the 10% neutral threshold. This suggests no signs of panic selling or significant demand for bearish leveraged positions (shorts).
Similarly, Bitcoin options skew, which measures the price difference between call (buy) and put (sell) options, was largely unaffected by the price drop. In neutral markets, the 25% delta skew typically ranges between -6% and +6%, with values below that indicating bullish sentiment.
Bitcoin 30-day options 25% delta skew, put-call. Source: Laevitas.ch
The BTC options skew briefly shifted from -7% to -2%, moving out of bullish territory. However, professional traders quickly adjusted their positions, bringing the metric back to -6%, near the boundary of a neutral-to-bullish market. More importantly, the dip below $98,000 did not trigger excessive downside hedging demand, demonstrating resilience in the derivatives market.
Bitcoin and crypto market sentiment remains cautious
To assess whether sentiment is limited to Bitcoin derivatives, it is crucial to analyze stablecoin demand in China. When traders exit cryptocurrency markets, USD Tether (USDT) typically trades at a discount to the official Yuan exchange rate. Conversely, during bull runs, stablecoins can trade at a 1.5% or higher premium.
USD Tether (USDT) trades vs. official USD/CNY rate. Source: OKX
Currently, USD Tether is trading at a 0.7% discount to the official USD/CNY rate, signaling moderate selling pressure. However, this represents an improvement from recent days when USDT traded at a 1.5% discount. This trend has been noticeable since Jan. 19, shortly after Bitcoin reclaimed the $105,000 level, following 30 days below this resistance.
Data from derivatives markets shows that professional traders remain cautiously optimistic and relatively comfortable with Bitcoin above $100,000. However, overall cryptocurrency demand in China remains weak. Likely, external factors are weighing on sentiment.
Related: Bitcoin could top $150K before retrace in repeat of 2017 cycle, says analyst
One such factor is the emerging signs of a global economic slowdown, which has led investors to shy away from riskier assets. Additionally, weakness in artificial intelligence stocks on Dec. 27, triggered by competition from the Chinese AI company DeepSeek, has fueled a sell-off. Although Bitcoin historically shows a low correlation with tech stocks, rising uncertainty in traditional markets has led traders to reduce risk.
For long-term Bitcoin investors, the outlook remains “half full.” Eventually, investors are likely to turn to scarce assets like Bitcoin as a hedge against inflationary central bank policies. However, in the short term, the likelihood of Bitcoin reaching a new all-time high appears low.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.