Bitcoin Options Market Structure Leans Toward $60K Retest in February

Bitcoin's price has fallen more than 40% despite stocks and precious metals attracting buyers. This situation is partly a result of a shift in capital from Bitcoin to assets like gold and global equities. The institutionalization of Bitcoin through ETFs and futures has brought real advantages but also introduced new vulnerabilities.

Two major Bitcoin ETFs, BlackRock's IBIT and Fidelity's FBTC, experienced significant outflows, highlighting shifting investor sentiment and volatility in the market. These movements reflect the broader narrative of strong cumulative inflows since the ETFs' launch.

Bitcoin is currently trading in a $60K to $70K range, echoing patterns seen after the 2021 crash. Historical data suggests that a similar 30-month cycle could extend expansion toward a $120K retest into 2027–2028.

Why the Move Happened

Bitcoin's integration with Wall Street has created structural vulnerabilities. Institutional dependence on American capital is now in retreat, as hedge funds previously profited from basis trades that have lost appeal as spreads have narrowed. Yield-generating products have exacerbated price swings when market conditions shift, limiting Bitcoin's ability to respond to positive news.

The recent outflows in major Bitcoin ETFs point to broader investor caution. Bitcoin's price volatility, combined with macroeconomic conditions and portfolio rebalancing, has led to this trend.

How Markets Responded

Bitcoin's current price structure mirrors the 2021 cycle, with a potential 30-month cycle extending into 2027–2028. This phase may be a long-term base-building period, where time plays a key role in structuring cycles.

The $60K level is a critical support point. If breached, it could trigger forced liquidations and a downward spiral due to leverage and hedging activity. Analysts warn that a sustained break below $60K might lead to further correction toward the $40,000s.

What Analysts Are Watching

Bitcoin traders are closely monitoring the $60K level as a key indicator of market health. A drop below this level could activate automatic sell-offs from Bitcoin-backed loans and options contracts.

Investors are also watching for signs of bullish RSI divergence, which could mirror the 2022 reset phase. If Bitcoin forms such a divergence without breaking below $60K, it might signal a stronger recovery.

The current phase reflects a period of consolidation. Analysts argue that short-term outflows do not necessarily signal a failure of the ETF experiment, and the broader narrative remains one of cumulative inflows.