Finance

Bitcoin’s $112,000 Ascent: Why Derivatives Traders Are Betting Against a $120,000 Surge

Bitcoin rose past $112K, but derivatives show caution. ETF outflows and altcoins fueled the uncertainty.

September 9, 2025, 10:39 AM

A gold Bitcoin coin rests on top of a price chart, symbolizing the cryptocurrency's financial performance.

As Bitcoin's value fluctuates, this gold coin sits atop a price chart, symbolizing the cryptocurrency's volatility. By Miami Daily Life / MiamiDaily.Life.

Executive Summary

Despite Bitcoin recovering to $112,000, derivatives markets signal pervasive caution among traders, with a surge towards $120,000 appearing improbable in the immediate term.

This cautious sentiment is primarily driven by recent spot Bitcoin ETF outflows totaling $383 million, disappointment over Strategy’s exclusion from the S&P 500, and increased competition from altcoins like Ether.

Bitcoin options delta skew indicates a premium for put options, reflecting a preference for neutral-to-bearish strategies, though a stabilization of spot Bitcoin ETFs could improve overall market sentiment.

The Story So Far

The pervasive sense of caution among Bitcoin traders, despite a recent price recovery, is primarily driven by substantial spot Bitcoin exchange-traded fund (ETF) outflows, disappointment surrounding Strategy’s (MSTR) exclusion from the S&P 500 index, and broader macroeconomic factors like weaker U.S. labor market figures bolstering expectations for monetary easing, alongside increasing competition from altcoins such as Ether.

Why This Matters

Despite Bitcoin’s recent price recovery, a pervasive sense of caution in derivatives markets, fueled by significant spot ETF outflows, macroeconomic uncertainty, and increasing competition from altcoins, suggests that a sustained rally towards $120,000 is improbable in the near term. This environment indicates investors are awaiting clearer catalysts, such as a stabilization of spot Bitcoin ETFs, before committing to more bullish positions, thus prolonging the current period of uncertainty for the leading cryptocurrency.

Who Thinks What?

Derivatives market traders are exhibiting caution, with options pricing and neutral perpetual futures funding rates reflecting a skeptical, neutral-to-bearish preference and making a surge towards $120,000 improbable in the immediate term.

Investors and broader market participants are unsettled by significant spot Bitcoin ETF outflows and Bitcoin’s failure to mirror the fresh all-time highs observed in the S&P 500 and gold.

Some companies are increasingly allocating to Ether as a corporate reserve asset, indicating growing competition for Bitcoin and potentially influencing overall market sentiment.

Bitcoin climbed above $112,000 on Monday, recovering from the previous week’s $108,000 level, yet derivatives markets indicate a pervasive sense of caution among traders. This guarded sentiment is primarily driven by recent spot Bitcoin exchange-traded fund (ETF) outflows and the disappointment surrounding Strategy’s (MSTR) exclusion from the S&P 500 index. Market participants are now grappling with what is hindering confidence and if the digital asset possesses the momentum to break past the $120,000 mark.

Derivatives Point to Persistent Caution

BTC options delta skew currently sits at 9%, signaling that put (sell) options are priced at a premium compared to equivalent call (buy) instruments. While this typically suggests risk aversion, it may also reflect recent trading conditions rather than a definitive expectation of a sharp decline.

Nonetheless, a noticeable jump in demand for put options on Monday reversed prior trends, pointing towards a stronger preference for neutral-to-bearish strategies. This indicates that traders remain cautious about a potential drop below the $108,000 support level.

Broader Market Influences and ETF Outflows

This prevailing lack of enthusiasm among Bitcoin traders is partly attributed to the cryptocurrency’s failure to mirror the fresh all-time highs observed in both the S&P 500 and gold. Furthermore, weaker-than-expected labor market figures in the United States have bolstered expectations for future monetary easing.

According to the CME FedWatch tool, traders now assign a 73% probability that interest rates will fall to 3.50% or lower by March 2026, a significant increase from 41% just a month ago. These macroeconomic factors contribute to the cautious stance.

Spot Bitcoin ETFs recorded substantial net outflows of $383 million between Thursday and Friday, a development that likely unsettled investors despite Bitcoin successfully holding the $110,000 support level. This marks a key area of concern for market participants.

Competition from Altcoins and Ether

Compounding the cautious sentiment, Ether (ETH) appears to be gaining traction as a corporate reserve asset, with companies allocating an additional $200 million to it over the past week, according to StrategicETHReserve data. This growing competition may be influencing overall market sentiment towards Bitcoin.

Bitcoin’s perpetual futures funding rate is currently neutral at 11%, an improvement from the bearish 4% observed on Sunday. However, traders might also be reacting to heightened competition from altcoins, particularly after Nasdaq filed with the U.S. Securities and Exchange Commission to list tokenized equity securities and exchange-traded funds (ETFs).

Outlook Remains Uncertain

In summary, Bitcoin’s recent move above $112,000 has not been met with strong conviction in the derivatives markets, with both options and futures reflecting skepticism. A surge towards $120,000 appears improbable in the immediate term given current conditions.

However, a stabilization of spot Bitcoin ETFs could quickly improve overall sentiment, potentially setting the stage for renewed price momentum for the leading cryptocurrency. The market awaits a catalyst to shift traders out of their cautious stance.