- According to Amberdata, Bitcoin’s journey to $120,000 could be delayed.
- Slow expectations of Fed rate cuts and institutional positioning could negatively impact BTC
Options traders have been eyeing a $120,000 price target Bitcoin [BTC] by March. However, the latest institutional market positioning and macroeconomic headwinds could delay the projection.
In its weekly update, Crypto Options analytics firm Amberdata cited persistent US inflation as a short-term risk for BTC and the overall market. Part of the report read,
“Next week we will get more clarity about inflation with the PPI on Tuesday and Wednesday. A strong economy and rising inflation would be the bearish scenario for bonds. This would flow into equities and risk assets as a secondary effect.”
Last week’s market correction and BTC’s retest of range lows were driven by growing expectations of fewer Fed rate cuts in 2025. In fact, the markets were almost praising 98% chance that the Fed’s next interest rate decision on January 31 would remain unchanged.
Coinbase analysts recently shared a similar message cautious outlookdriven by macro factors and the supply of long-term holders. They claimed that BTC’s upside could be limited in the short term.
Bitcoin’s $120,000 target
Most expectations of a likely BTC rally above $100,000 are tied to President-elect Donald Trump’s positive policy announcements for space, including a strategic BTC reserve (SBR).
However, Amberdata warned that policy updates are most likely already priced in. Furthermore, the company noted that institutional traders were betting on a possible drop in BTC to $55,000. This could further delay the $120,000 goal.
“Looking at top block trades, the institutional traders are also theoretically bullish on Bitcoin prices, but instead of buying calls, they are selling March $55k Puts and June $55k Puts (shorting volatility instead of trading them). buy).”
Source: Amberdata
Put options are bearish bets typically associated with big players hedging against downside risk.
Amderdata added that selling puts instead of buying them could reduce implied volatility (future price movements). This hinted at muted price movements (more price stability), which could limit a strong move to $120,000.
At the time of writing, BTC had risen above $95,000, driven by a liquidity sweep of $96,000 (bright yellow area). Additional liquidity pockets were located at $99,000 and $90,000, which could further impact the price action.
Source: Coinglass