Bitcoin Bullish Sentiment Surges as Put-to-Call Ratio Drops to 0.8

Bitcoin is on the verge of a significant rally, with analysts and traders predicting a potential surge to $120,000. This optimism is driven by a shift in sentiment from bearish to bullish, as evidenced by the put-to-call ratio on Deribit dropping to 0.8, indicating a strong bullish sentiment among traders. This shift suggests that traders are increasingly confident in Bitcoin's potential for upward movement.

Bitcoin has been consolidating within a narrow range between $107,300 and $110,600 since midweek. Historically, such price action has often preceded breakouts, and traders are closely monitoring the charts for signs of a major move. The relative strength of Bitcoin in the face of macroeconomic uncertainty has also contributed to this rise in optimism. Many investors are viewing Bitcoin as a hedge against potential economic downturns and political instability, seeing it as a long-term alternative to traditional financial assets.

Over the weekend, there was a spike in demand for put options, indicating that some traders were preparing for a downturn. However, this fear was short-lived, as the put-to-call ratio on Deribit dropped to 0.8 by Monday, showing that traders were buying more call options instead. This shift away from downside protection reflects a growing belief that Bitcoin could soon move higher. Additionally, the rebound in the futures premium, which climbed back above the 5% neutral mark by Monday, further supports this bullish view. Historically, when this premium rises, it generally means investors are more willing to pay for exposure to future price gains.

Another major catalyst behind Bitcoin’s strengthening narrative is the growing fears over an economic slowdown. The recent announcement of a 25% tariff hike on imports from Japan and South Korea led to a spike in U.S. Treasury yields. Surprisingly, Bitcoin managed to hold steady above $107,000 during this period, reinforcing its position as a safe haven, especially in times of political or economic uncertainty. According to analyst Ted Pillows, Bitcoin has historically been correlated to the global monetary supply. If this trend holds true, we may be looking at an incoming push to the upside. Delays in U.S. tariff implementation could further clear the way for Bitcoin to hit $120,000 in the coming months.

Bitcoin futures data also adds more weight to the bullish case. Over the past 30 days, open interest (OI) in Bitcoin futures contracts has risen by 7%, which is the first meaningful increase since the massive market pullback in February. Historically, rising open interest alongside stable prices shows that new capital is entering the market, and the asset is setting itself up for higher prices. According to researcher Axel Adler Jr., while a 7% rise is promising, a confirmed breakout might require open interest to grow by at least 10%. Overall, short-term price action shows that Bitcoin may revisit the $107,300 level before making its next big move. However, if Bitcoin breaks below $107,000, it could temporarily fill the fair value gap down to $106,300. If the bulls quickly initiate a rebound from this zone, prices could shoot back up above $108,000 and build momentum toward $112,000 and beyond. In summary, a strong defense of the $108,000 level followed by a clean break above $109,500, would invalidate the bearish scenario entirely. That could set Bitcoin on a fast track toward the $112,000 mark, and possibly even higher.