fter finding support near $60k following last month's plunge, the Bitcoin price has rebounded over 12% to reclaim $63k as of mid-May 2024. The rally has fueled growing bullishness among cryptocurrency options traders, many of whom are renewing bets that BTC could reach - or even surpass - the coveted $100k mark before year's end.
Data from major crypto exchange Deribit shows a notable surge in open interest for call options targeting the $100k strike price across various expiry dates extending into the third quarter of 2024. With over $688 million now locked into these lofty bets, the $100k call has by far the highest total notional value of any listed option on the platform. Demand has also increased sharply on OTC trading networks like Paradigm for out-of-the-money calls at the $75k and $100k strikes expiring in July through September.
The pickup in $100k call buying follows comments from Federal Reserve Chairman Jerome Powell signaling a more "data-dependent" policy approach going forward. Traders took this to mean rate hikes are off the table for now barring a major shift in inflation. Subsequent weaker-than-expected U.S. jobs data reinforced the dovish pivot. A softer dollar typically benefits commodities like Bitcoin, giving bulls added confidence the rebound can continue carrying BTC to new highs above the late 2023 peak.
Technical Signals Point to More Upside Potential
Leading crypto analysts also cite technical factors supporting the case for Bitcoin to trend higher in the months ahead. In an analysis shared with CoinDesk, John Glover of institutional crypto lender Ledn identified BTC's price action as tracking an expected Elliot wave pattern that implies a movement to around $92k could be in store.
Elliott wave theory proposes that asset prices unfold in repetitive five-wave sequences, with waves 1, 3 and 5 fueling the primary bull trend. Glover sees the current bounce as the beginning of a fifth and final wave up from the 2018 cycle lows. Hitting his $92k target would see Bitcoin rise another 45% from current levels.
Meanwhile, cryptocurrency research firm Delphi Digital highlighted continued strong network fundamentals like rising small-output transaction totals as positive drivers behind Bitcoin. In a market update, Delphi said these usage metrics reinforce the longer-term bull thesis and diminish the risks of a sharp correction even if volatility persists through mid-2024.
Overall, traders are growing confident that with falling dollar headwinds and stablecoin activity rebounding, conditions remain aligned for Bitcoin to press beyond its previous all-time high and challenge six-figure territory before year-end. Options pricing and positioning signal this view has taken hold among sophisticated investors once again.
DXY Path Key for Near-Term BTC Direction
Swiss-based digital asset manager SwissBlock believes the trajectory of the U.S. Dollar Index (DXY) over the coming quarters will be a major determiner of Bitcoin's shorter-term price moves. In recent research, the firm pointed out Powell's less hawkish comments have weighed on the greenback from over 105 to below that level currently.
As long as incoming economic data don't conflict with the softer Fed policy narrative and officials don't disrupt Powell's dovish shift, the dollar is likely to remain defensive. That supports continued upside for dollar-denominated commodities like BTC. However, more hawkish Fed voices suggesting higher rates could stay for longer might halt the dollar's slide and create temporary Bitcoin headwinds.
The market consensus seems to be coalescing again around the view that barring an unexpected change in monetary policy communications or major geopolitical shock, Bitcoin's path of least resistance points higher towards a potential six-figure prize by the end of 2024.
