Bitcoin Options Signal Bullish Momentum Ahead of CPI Data Release

The cryptocurrency market is showing signs of recovery after a period of uncertainty, with Bitcoin climbing back above $106,000 and options markets signaling potential further gains. This renewed optimism comes as traders position themselves ahead of Wednesday’s critical U.S. inflation data, which could significantly impact Federal Reserve policy decisions and market sentiment.

Bitcoin rose 1.2% over the weekend to trade around $106,600, while the broader CoinDesk 20 (CD20) index added nearly 1.7%. This recovery appears to mark a cooling of tensions following last week’s public disagreement between U.S. President Donald Trump and Tesla CEO Elon Musk that had previously unsettled investors.

Options Market Reveals Strong Bullish Sentiment

The Bitcoin options market is currently painting a decidedly bullish picture. Data from Deribit shows total open interest has reached an impressive $32.9 billion, with calls significantly outweighing puts at a ratio of nearly 2:1 (200,000 call contracts versus 110,000 put contracts).

The put/call volume ratio stands at just 0.54, demonstrating continued strong demand for upside exposure. Perhaps most telling is that the $140,000 strike price leads all others with 16,100 calls open, representing $1.79 billion in notional value – a clear indication that many traders are positioning for substantial price appreciation.

Monday’s flow data reinforces this bullish outlook, with 31% of contracts being calls bought and only 17% puts bought. The remainder of trading activity came from call and put selling, suggesting traders are implementing sophisticated strategies that combine bullish positioning with yield-generating approaches at higher strike prices.

Market Recovery Despite Negative Headlines

What’s particularly notable about Bitcoin’s recent price action is its resilience in the face of developments that might typically be considered negative. Taiwan-based crypto exchange BitoPro confirmed being hacked, while data from Blockchain.com revealed that Bitcoin’s network activity has slowed to its lowest level in a year. Yet neither event appeared to significantly impact market sentiment.

Meanwhile, broader financial markets are showing mixed signals. The Hang Seng index jumped 1.6% as traders responded positively to U.S. President Donald Trump expressing optimism for talks with China that begin today in London. However, concerns over deflation in China continue to mount, with consumer prices falling 0.1% year-over-year in May and factory gate prices dropping 3.3% – the steepest decline since October 2022.

All Eyes on Wednesday’s CPI Data

While Bitcoin‘s short-term price action has been encouraging for bulls, the cryptocurrency market’s immediate future may hinge on Wednesday’s U.S. Consumer Price Index (CPI) report. May’s data is expected to show an increase in core inflation to 2.9%, up from 2.8% in April.

A stronger-than-expected inflation reading could potentially delay the Federal Reserve’s next interest rate cut and inject volatility across financial markets, including cryptocurrencies. The yield on the 10-year Treasury has already climbed to 4.5%, a level that could begin to weigh on market sentiment if inflation surprises to the upside.

Spanish bank Bankinter warned in a Monday note that rising inflation and U.S. bond yields could pressure equity valuations and weaken the “fear of missing out” momentum that has been supporting global stocks and other risk assets. For now, cryptocurrency markets appear caught in this broader macroeconomic crossfire.

Technical Analysis Suggests Potential Breakout

Bitcoin’s technical indicators are showing promising signs of recovery. The cryptocurrency has reclaimed the 20-day exponential moving average (EMA) on the daily timeframe after retesting the 50-day EMA for the first time since breaking out from the $85,000 level. Significantly, price action has broken out of a downward trendline, potentially signaling a shift in momentum.

However, BTC remains within a key daily order block, which may act as resistance in the near term. For the current bullish sentiment to continue, it’s crucial for Bitcoin to maintain its position above these reclaimed EMAs and secure a weekly close above $109,400. Such a move would invalidate the current weekly swing failure pattern and confirm the cryptocurrency’s underlying strength.

Funding rates from Velo data show BTC annualized funding holding near 6.2%, reflecting a moderately bullish stance without indicating excessive leverage in perpetual markets – a healthy sign for sustainable price appreciation.

Liquidation Levels to Watch

While the overall sentiment appears positive, traders should remain mindful of potential liquidation triggers. Coinglass liquidation heatmaps show high concentrations of long leverage near $104,000 and $107,000. A total of $39 million in liquidation leverage is stacked around $104,700, making this a key downside level to monitor for potential forced selling if the market turns south.

Such liquidation cascades can exacerbate downward price movements, creating a feedback loop that may lead to sharper corrections than fundamentals alone might suggest. Risk management remains essential even in bullish market conditions.

Key Upcoming Events That Could Impact Bitcoin

Several notable events in the coming days could influence cryptocurrency markets:

• June 10, 10 a.m. ET: U.S. House Financial Services Committee hearing for Markup of Various Measures, including the crypto market structure bill (the Digital Asset Market Clarity Act)
• June 11, 8:30 a.m. ET: The U.S. Bureau of Labor Statistics releases May consumer price inflation data
• June 12: Aptos (APT) to unlock 1.79% of its circulating supply worth $53.61 million
• June 16: 21Shares executes a 3-for-1 share split for ARK 21Shares Bitcoin ETF (ARKB)
• June 16: Brazil’s B3 exchange launches USD-settled ether and solana futures contracts

In the governance space, ApeCoin DAO is considering scrapping its current structure and launching “ApeCo” to “supercharge the APE ecosystem,” while Optimism DAO is voting on eligibility criteria for its Milestones and Metrics Council, with voting set to end June 11.

ETF Flows Signal Divergent Bitcoin and Ethereum Sentiment

Institutional investment flows through ETFs tell an interesting story about current market dynamics. Spot Bitcoin ETFs recorded net outflows of $47.8 million in the latest data, though cumulative net flows remain strongly positive at $44.22 billion with total BTC holdings around 1.2 million.

In contrast, spot Ethereum ETFs are showing renewed momentum, with daily net inflows of $25.3 million and an impressive streak of 15 consecutive days of positive flows. These sustained inflows follow Ethereum’s recent Pectra upgrade and come as the ETH/BTC ratio recovers from more than a five-year low below 0.02.

The divergence may suggest that institutional investors are beginning to rotate some capital from Bitcoin to Ethereum as the latter shows signs of technical recovery after significant underperformance.

Global Macroeconomic Context

The broader macroeconomic landscape continues to influence cryptocurrency markets. China’s exports to the U.S. recorded their sharpest drop in more than five years, falling over 34% in May. Economist Tianchen Xu expects a June rebound following the impact of U.S. tariffs in April and May, with a second round of trade talks beginning in London.

The Hang Seng index responded positively to the prospect of improved U.S.-China relations, rising past 24,000. Meanwhile, financial markets worldwide are awaiting U.S. inflation data that is expected to show tariff-driven increases in prices of core goods.

In Argentina, President Javier Milei was cleared of misconduct allegations related to his promotion of the LIBRA memecoin, with the country’s anti-corruption office determining he acted in a personal capacity as an economist rather than as a government official.

Crypto Equities Performance

Publicly traded companies with exposure to cryptocurrencies have generally performed well in recent sessions:

• MicroStrategy (MSTR): closed Friday at $374.47 (+1.54%), trading at $381.49 (+1.87%) in pre-market
• Coinbase Global (COIN): closed at $251.27 (+2.9%), trading at $255.10 (+1.52%) in pre-market
• Circle (CRCL): closed at $107.7 (+29.4%), trading at $118.50 (+10.21%) in pre-market
• Marathon Digital Holdings (MARA): closed at $15.78 (+6.05%), trading at $16.17 (+2.47%) in pre-market
• Riot Platforms (RIOT): closed at $9.85 (+9.57%), trading at $10.14 (+2.94%) in pre-market
• Core Scientific (CORZ): closed at $12.19 (+2.18%), trading at $12.30 (+0.9%) in pre-market

The CoinShares Valkyrie Bitcoin Miners ETF (WGMI) closed at $19.57, up 7.53%, reflecting the general strength in the mining sector as Bitcoin’s price stabilized above $100,000.

Notable Token Events and Launches

In the token space, Skate – a blockchain infrastructure layer focused on unifying liquidity across decentralized networks – is introducing its SKATE token with listings on Binance Alpha, Bybit, and MEXC. Formerly known as Range Protocol, Skate is building a framework that allows decentralized applications to run across multiple virtual machines without requiring separate deployments.

The token has a fixed supply of 1 billion, with 10% being distributed via airdrops to early users, ecosystem contributors, and NFT campaign participants. MEXC’s pre-market trading saw prices initially jump 33% to $0.20 before settling back to $0.12.

Several significant token unlocks are also scheduled in the coming days:

• June 12: Aptos (APT) – 1.79% of circulating supply ($53.61M)
• June 13: Immutable (IMX) – 1.33% of circulating supply ($12.82M)
• June 15: Starknet (STRK) – 3.79% of circulating supply ($16.90M)
• June 15: Sei (SEI) – 1.04% of circulating supply ($10.59M)
• June 16: Arbitrum (ARB) – 1.91% of circulating supply ($32.21M)
• June 17: ZKsync (ZK) – 20.91% of circulating supply ($41.25M)
• June 17: ApeCoin (APE) – 1.95% of circulating supply ($10.88M)

These unlocks will release tokens worth approximately $179 million into the market, potentially creating short-term selling pressure for these assets.

Ethereum’s ETF Streak Signals Potential Rotation

While Bitcoin has captured most of the headlines in recent months, Ethereum’s quiet recovery deserves attention. The second-largest cryptocurrency has now recorded 15 consecutive days of positive net flows into its spot ETFs in the U.S.

This sustained institutional interest follows Ethereum’s Pectra upgrade and comes as the ETH/BTC ratio shows signs of recovery from multi-year lows. The ratio had fallen below 0.02, representing significant underperformance relative to Bitcoin, but appears to be stabilizing and potentially reversing course.

If this trend continues, we could see increased rotation from Bitcoin to Ethereum among both institutional and retail investors seeking assets with greater upside potential after Bitcoin’s dramatic run to all-time highs.

Key Takeaways and Market Outlook

As we approach the middle of June, several key themes are emerging in cryptocurrency markets:

1. Options market sentiment is decisively bullish, with calls significantly outnumbering puts and positioning concentrated around higher strike prices.
2. Wednesday’s CPI report represents a critical inflection point that could determine near-term market direction through its impact on Federal Reserve policy expectations.
3. Technical indicators suggest Bitcoin has broken its downward trend, though it needs to secure a weekly close above $109,400 to confirm renewed momentum.
4. Institutional flows show potential early signs of rotation from Bitcoin to Ethereum, with the latter enjoying an impressive streak of positive ETF inflows.
5. Global macroeconomic factors – particularly U.S.-China relations and inflation trends – continue to exert significant influence over cryptocurrency markets.

The coming days will be crucial for determining whether Bitcoin can build on its weekend recovery and push toward new all-time highs, or whether macroeconomic concerns will trigger a more extended period of consolidation. Traders should maintain appropriate risk management while monitoring key support and resistance levels, particularly ahead of Wednesday’s inflation data.

As always in cryptocurrency markets, volatility remains the only certainty. However, the positive options positioning suggests that professional traders, at least, remain confident in Bitcoin’s medium-term outlook despite recent market turbulence.

Frequently Asked Questions

Learn more about advanced crypto investment strategies and how to navigate market volatility.