Macro Fears Cap Bitcoin Upside Despite 3-Week High

The key takeaways

• Bitcoin reached a high of $90,000 but options data indicates that traders are uncomfortable with exposure to downside risks.

• Bitcoin spot ETF withdrawals and the low demand for leverage suggest that investors are still cautious of near-term gains.

Bitcoin prices are held back by economic uncertainty

BitcoinBTC( ) rose above $95,000 on Saturday. Traders questioned whether the momentum was there to return to the level of $95,000 for the first week in seven.

Even as the S&P 500 traded just 1.3% below its all-time high, investors grew concerned about worsening economic conditions, especially after electric-vehicle automaker Tesla (TSLA US) reported disappointing sales.

Futures on the Nasdaq, a tech-heavy index, failed to reach the 26,000. The sector is still torn by the conflict between the optimism surrounding artificial intelligence (AI) and the risks associated with weaker US employment data.

According According to Bloomberg, Tesla delivered 418.227 vehicles in the fourth-quarter, down from 495,570 units a year ago. Tesla shares declined 2.5% last Friday and now remain 12.2% under their record high.

China, on the other hand, has shown moderate optimism after its tech giant Baidu’s (BIDU-US) shares surged by 15%. Hong Kong’s stock exchange has approved the company to list its artificial-intelligence chip division, Kunlunxin.

The Nasdaq has seen a 20% increase in the tech sector by 2025. However, traders are concerned that valuations have grown too high.

BTC reaches multi-weeks highs but leverage remains cool

Even though Bitcoin reached its highest levels in December, the demand for leveraged BTC Bullish Positions remained unchanged on Saturday.

Bitcoin’s price is still stuck in a 6% band over the last 20 days. This has investors worried as it continues to take longer to break above the resistance.

Bitcoin’s futures base rate was below neutral on Friday. This showed a lack in confidence by bulls.

This 4% increase in the annualized price over spot prices reflects concerns among traders that US import duties could have a negative impact on the broader economic climate. Positively, the recent retest on the $85,000 mark was insufficient to trigger wider bearish sentiment.

Selling pressure of Bitcoin exchange-traded fund (ETF) spot can be linked with the lack demand for bullish leveraged Bitcoin positions. The products in question have recorded over $900 million since December 15. net outflows.

While gold ETFs continue to show net flows, they have been averaging seven weeks in a row, which could indicate weakened confidence in US growth, amid growing concerns regarding government fiscal policy.

The skepticism is near 90,000 dollars, but the panic is not present

It is important to look at the activity of the Bitcoin market in order to determine whether Bitcoin traders and whales have become bullish after the recent 3.2% increase over the past two days. BTC options market.

Bitcoin put options (sell) traded at a higher premium on Saturday as traders sought a greater compensation for the downside risk.

The indicator is not yet bullish. This is usually indicated by a put-call skew that is inverse. BTC derivatives indicate a skepticism that persists near the $90k level. However, there is no sign of a bullish turn. excessive fear.

Related: No, whales are not accumulating massive amounts of Bitcoin: CryptoQuant

The US government is planning to introduce tax incentives for consumers to combat inflation. stimulate the economy. According to CME, bond futures are only pricing a 16 percent probability of interest rates falling to 3.25% by April. FedWatch Tool.

Bitcoin derivatives traders are not expecting further gains in price, but they do expect confidence to slowly return following the consolidation that lasted a whole month around $89,000.

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