Bitcoin falls below $104K, but data shows BTC traders positioned for a rebound

2 weeks ago

Key takeaways:

BTC futures and options amusement unchangeable concern sentiment contempt the caller terms correction.
Macroeconomic uncertainty and the escalating US commercialized warfare trim the likelihood of Bitcoin retesting its caller all-time high.

Bitcoin (BTC) fell 5.5% betwixt May 27 and May 30, retesting the $104,000 level for the archetypal clip successful eleven days. Despite the correction, nonrecreational Bitcoin traders remained optimistic, arsenic reflected successful BTC derivatives information and continued request for stablecoins successful China.

BTC has been moving successful adjacent alignment with US authorities bonds, suggesting that macroeconomic factors are apt down the weakness pursuing the all-time precocious of $111,970 connected May 22. The commercialized warfare led by US President Donald Trump has made investors much risk-averse.

Yields connected 10-year US Treasury bonds peaked astatine 4.60% connected May 22 but person since dropped to 4.42% arsenic investors sought the information of government-backed assets. Falling yields suggest traders are accepting little returns, indicating accrued buying activity. This displacement coincided with Bitcoin’s $7,900 diminution from May 22 to May 30.

The Bitcoin futures premium is presently astatine 7%, unchanged from May 27, erstwhile BTC traded adjacent $110,000. This level falls comfortably wrong the neutral 5% to 10% range, making it improbable that futures were the origin of the correction. More importantly, there’s nary grounds that excessive leverage contributed to the all-time precocious connected May 22.

The aggregate unfastened involvement successful BTC futures, equivalent to 700,000 BTC connected May 30, was lone 2% beneath the level observed connected May 27, indicating nary important driblet successful traders’ appetite for leveraged positions. In fact, liquidations of bullish BTC futures positions totaled $323 cardinal implicit 4 days, little than 0.5% of full unfastened interest.

The Bitcoin options marketplace besides showed a constricted absorption to the $104,000 retest. The 25% delta skew remains wrong the neutral scope of -6% to +6%, indicating that traders are pricing adjacent probabilities for upward and downward movements. Typically, erstwhile whales and marketplace makers expect further downside, the metric rises supra 6% arsenic enactment (sell) options statesman to commercialized astatine a premium.

Tether (USDT) has been trading astatine a insignificant 0.4% discount successful China comparative to the authoritative USD/CNY rate, suggesting that Bitcoin’s diminution has not triggered a wide exit from the crypto market. This points to a rotation into stablecoins, apt arsenic investors await reduced macroeconomic uncertainty.

The beardown short-term correlation betwixt US Treasurys and Bitcoin, combined with unchangeable BTC derivatives metrics, shows that nonrecreational traders are not alarmed by the pullback to $104,000. From a method perspective, the caller correction does not awesome reduced involvement from traders contempt the $347 cardinal nett outflows from the spot Bitcoin exchange-traded funds (ETFs) connected May 29.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

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