The key takeaway is:
BitcoinBTC() increased by 3.5% from June 7 to June 9 and reached $108,500. Professional traders are still cautious despite this recent increase, which is reflected by BTC derivative metrics. Bitcoin’s short-term potential is limited by macroeconomic tensions and its strong correlation to the stock exchange.
Bitcoin is expected to grow in value by some analysts. rally to $150,000 As the US Government nears an increase of $4 trillion to its debt limit. The data from the futures markets suggests a temporary hesitance. This is probably due to infavorable macroeconomic indicators and an incorrect interpretation of Bitcoin. potential supply shock.
Since June 6, Bitcoin futures premiums Near the neutral baseline rate of 5%. Recent price increases have not yet inspired significant confidence in traders. It would not be accurate to state that sentiment among traders is pessimistic. Bitcoin, for example, currently trades at just 3% of its all-time $111,965 high, set on May 22, so it’s hard to call the current price increase a sign of confidence.
A healthy foundation for the market is evident by the recent price change. Bitcoin will not be able to hold its current levels above $110,000 if the recession worries persist. This is because of its strong correlation with traditional stock markets.
At present, Bitcoin’s correlation with the S&P 500 stands at 82%, meaning the two assets have moved in similar directions. This trend has been in effect for four weeks. Despite the fluctuating correlation over the last nine months, most investors still view Bitcoin as an asset to be taken on risk rather than one that is a hedge.
Bitcoin may struggle to survive against wider economic pressures
The concerns of investors have been heightened by past instances where the US trade conflict intensified and negatively affected nearly all asset classes, including stocks, oil, Bitcoin, etc. Bitcoin is designed to withstand periods of uncertainty. Bitcoin may gain popularity as risk perceptions shift if confidence in US fiscal stability declines.
Bitcoin short-term to long margin ratio At OKX, longs exceed shorts by four times. This ratio has historically been influenced by excessive confidence, which has seen it rise above 20x. Levels below 5 times are considered bearish.
These indicators do not indicate that market makers or large investors are planning a Bitcoin crash.
Related: Strategy adds 1,045 Bitcoin for $110M in latest purchase
Investors’ confidence in US Treasury’s management of mounting debt could continue to decline. This can lead to capital being able to flow. exit government bonds. Unlike the S&P 500, which holds a $50 trillion valuation, or gold at $22.5 trillion, Bitcoin could surge past $150,000 even by capturing a small share of these outflows.
Bitcoin is vulnerable to downward price pressure in the short-term, especially if there’s a confirmed recession. The lingering effects of the high interest rate and concerns over the trade war will likely limit Bitcoin’s short-term growth.
The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.
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Source: cointelegraph.com
