Important takeouts:

• Bitcoin is trading at an all-time high, but derivative data shows traders being cautious and uncommitted.

• China’s USDT discounts and spot Bitcoin ETF leaks highlight investors’ concerns over global trade tensions.

Bitcoin (BTC) exceeded $109,000 on Wednesday after briefly retesting its support level at $105,200 earlier in the day. This surge coincided with indicators of financial expansion in the eurozone and signs of weakness in the US labor market.

While Bitcoin trading is just 2% shy of its all-time high, data from BTC derivatives suggests that traders remain hesitant to adopt a bullish stance. This reluctance has prompted some investors to question whether the rally is sustainable.

On Wednesday, the Bitcoin Futures Premium stayed below the neutral 5% mark. It marked a slight uptick from 4% earlier in the week, a trend that began on June 11. This increase aligns with Bitcoin’s previous approach to the $110,000 mark, inching closer to bullish territory.

Is eurozone money supply increasing behind Bitcoin rallies?

Identifying a single cause for Wednesday’s rally is tricky, but the eurozone’s record-high money supply (M2) may have had an impact earlier. Recent data indicated a year-on-year expansion of 2.7%, which corresponds with a similar increase in the US monetary base. Meanwhile, the ADP report revealed a drop of 33,000 in private payrolls for June.

Some market observers suggest that the muted interest in Bitcoin’s leveraged long position reflects rising risks associated with a potential economic recession, especially amid an escalating global trade conflict. US President Trump recently threatened to increase tariffs on Japanese imports by over 30% if a deal is not struck by July 9.

The Financial Times reports that the eurozone’s ambassador has instructed EU trade commissioner Maroš Šefčovič to adopt a firmer approach during his Washington visit this week. The EU is allegedly pushing for a reduction in the 10% mutual tariff, although internal disagreements persist regarding any retaliatory measures.

Neutral Bitcoin Options Market and Stable Demand for Stubcoin in China

To better understand the subdued enthusiasm for Bitcoin derivatives beyond futures, it’s insightful to look at the BTC options market. If traders were anticipating a significant decline, the delta skew of 25% would typically rise above 6%.

Currently, the skew metric sits at 0% and hasn’t changed in the last two days, indicating that traders are weighing price movement risks carefully. This reflects a lukewarm sentiment at the $109,000 level, though it’s an improvement from the negative outlook noted on June 22.

Even with Bitcoin reaching a three-week high, demand for cryptocurrencies in China has taken a notable downturn, as indicated by Stablecoin Premium metrics.

Discounts on Tether (USDT) compared to China’s official dollar exchange rates often signal investor hesitation. In more stable conditions, strong cryptocurrency demand tends to drive stubcoins above their expected values. The current 1% discount is the largest since mid-May, suggesting a lack of confidence in Bitcoin’s recent gains.

Traders are increasingly apprehensive about the consequences of the ongoing tariff skirmish, especially following a $342 million net spill from Spot Bitcoin Exchange-Traded Funds (ETFs) on Tuesday. The calmness in the derivatives market reflects broader uncertainty in the macroeconomic landscape.

This article provides general information and should not be considered legal or investment advice. The views expressed here do not necessarily represent those of any specific organization.