- Options data predicted only a 16% chance of BTC reaching $85,000 by the end of the year.
- There was weak market demand and relatively little network growth.
Despite high expectations of a bullish Q4 and late 2024 rally for Bitcoin [BTC]the options market remained eerily cautious.
According to Bitwise’s head of alpha strategies: Jeff ParkThe options markets estimate only a 10% chance that BTC would reach $85,000 by the end of the year.
“Deribit 12/27 contracts now only price a ~10% chance of BTC reaching $85k by year end (using 20x levered 5k CS prices), while 7d VRP turned negative yesterday”
At the time of writing, the probability of BTC reaching $85,000 in December 2024 was around 16% per Deribit. facts.
Source: Deribit
Positive catalysts for BTC
However, Park also noted that the options market outlook could misjudge the target.
He found that the 7-day VRP (Volatility Risk Premium), which represents the volatility difference between the actual (spot) and options markets, turned negative. This meant that spot market volatility was lower than predicted for options.
The same could be said here for the year-end BTC price prediction in the options markets. It could overstate or undermine BTC’s prospects.
Park added that the upcoming FTX Refunds and the ongoing global easing cycle were positive catalysts for BTC.
Several companies and analysts have done that projected BTC price targets by the end of 2024. Bernstein predicted $90,000 in 2024 and $200,000 in 2025.
According to Standard Chartered Bank, the asset could reach $150,000 by the end of the year and rise to $250,000 by 2025.
However, some market experts believe that geopolitical tensions in the election results in the Middle East and the US could be crucial factors for BTC in the near term.
Network growth and demand
Source: Glassnode
Meanwhile, BTC’s network growth, based on active addresses, has hovered around 750K since late September.
However, it remained below 1 million, a level it surpassed when BTC recovered to a new ATH in the first quarter of 2024. This indicated less market interest in the asset in the fourth quarter than in the first quarter.
Weak short-term demand in October, especially from US investors, was also consistent with the above observation.
The Coinbase Premium Index, which measures demand from US investors, has been in the red in recent days.
Source: CryptoQuant
However, the short-term holder cost basis point of approximately $63,000 was crucial support that could determine whether BTC will stage a recovery in the near term.