Bitcoin briefly reached $70,200 on June 3, sparking cautious optimism among traders despite concerns about excessive leverage. The cryptocurrency's gain of 2.5% to $69,400 has reignited hopes of reclaiming the $69,000 support level for the first time in 11 days. This surge coincided with a notable increase in the Bitcoin futures premium, reaching its highest level in seven weeks. But what does this imply for the sustainability of Bitcoin’s rally toward $70,000?

Several factors have contributed to Bitcoin's recent price movement:

GameStop’s (GME) stock experienced a 36% rally, reminiscent of the 2021 retail-driven surge against traditional finance. This sentiment seems to have spilled over into the memecoin sector, with Floki gaining 16.5%, Dogwifhat (WIF) 9%, and Bonk 7.5%.

Neel Kashkari of the Federal Reserve Bank of Minneapolis indicated that he does not foresee interest rate cuts in the near future, citing strong aversion to inflation. This stance, although not unanimous among Fed officials, is perceived as negative for traditional markets like housing and stocks, prompting some investors to consider alternatives like Bitcoin.

Australia’s directive for Chinese investors to reduce their stakes in a rare earths miner has increased global market uncertainty. This geopolitical move coincided with a 1% gain in gold and a sell-off in U.S. Treasuries, with the 5-year yield dropping from 4.59% to 4.42%.

The Bitcoin futures premium, which reflects the difference between monthly contracts in the derivatives market and the spot level on regular exchanges, typically shows a 5% to 10% annualized premium. A higher premium indicates that traders are willing to pay more for future contracts, signaling bullish sentiment. Recently, the Bitcoin 3-month futures premium rose to 15%, the highest in seven weeks, indicating cautious optimism among traders.

To determine whether this sentiment extends beyond futures markets, analysts examine the Bitcoin options 25% delta skew. This metric measures the relative demand for bullish (call) and bearish (put) options. A negative skew suggests higher demand for call options, while a positive skew indicates a preference for put options. Neutral markets typically have a delta skew between -7% and +7%, indicating balanced pricing between calls and puts.

The 25% delta skew has remained stable around -3% over the past week, suggesting that traders are not excessively optimistic or pessimistic about Bitcoin’s short-term price movements. The last time Bitcoin options indicated optimism was on May 21, but this was short-lived as the $71,500 resistance level proved challenging to surpass.

Current data points to a healthy Bitcoin market driven by a mix of factors, including recession fears, geopolitical uncertainties, and a resurgence of anti-traditional finance sentiment. Key metrics like the Bitcoin futures premium and the 25% delta skew suggest cautious optimism among traders. This provides a stable foundation for potential price gains above $70,000. However, the sustainability of the rally will depend on continued positive sentiment and the ability to navigate potential market disruptions.