Bitcoin Reclaims $50K in Market Revival

Bitcoin has surged past the $50,000 mark for the first time since late 2021, signaling a strong recovery and entering what many are calling the FOMO (fear of missing out) stage of its bull market that began in January 2023. This rebound comes after a shaky period following the launch of spot ETFs on January 11, which initially saw the cryptocurrency dip below $40,000.

Market Recovery and Bullish Sentiment

Despite the influx of billions of dollars into the new spot ETFs, the spotlight was on the outflow from the high-fee Grayscale Bitcoin Trust (GBTC), causing Bitcoin’s price to drop to $38,500 shortly after the ETFs’ debut. However, Bitcoin has managed to climb significantly from its 2022 close of just above $16,000, a dramatic fall from its November 2021 peak of around $69,000. The year 2022 was marked by significant turmoil within the crypto sector, including the collapse of the Terra ecosystem and the FTX exchange, leading to widespread industry layoffs and closures.

Yet, as of October 1, 2023, Bitcoin had already shown a recovery to $27,000, reflecting a more than 65% increase for the year, albeit still modest compared to its historical highs.

Options Market Heats Up

Adding to the positive sentiment, traders have been actively pursuing options bets on Bitcoin reaching $65,000 and beyond. Over a recent weekend, significant activity was noted on Deribit, the leading crypto options exchange, with traders opting for bullish calls at $65,000, $70,000, and $75,000. This trend mirrors the bullish sentiment of the 2020-2021 bull market, where calls at even higher strikes were pursued.

These optimistic moves come despite concerns over potential price drops due to overbought conditions and the fallout from the bankruptcy of crypto lender Genesis. The market’s bullish outlook is further evidenced by the significant rise in Bitcoin’s price from $38,500 to $50,000 in just three weeks, largely driven by strong ETF inflows, indicating a robust revival of investor interest in Bitcoin.

At time of writing, Bitcoin is moving hands at $50,051.40 according to CoinMarketCap data, good for a weekly gain of more than 17%.