The key takeaways
- Whales are still maintaining their long/short ratios despite the fact that Bitcoin funding rates have fallen.
- Bitcoin trading sentiment is largely driven by inflation concerns and earnings of tech companies.
Bitcoin (BTC), after being rejected by $77,800 at the beginning of Wednesday, was then tested again for $76,000. This movement followed a correction in the S&P 500 Index as the war in Iran reached its 60-day mark, driving crude oil prices toward $118. Although the demand for leveraged Bitcoin futures with a bearish bias increased, whales’ long/short ratios on major exchanges indicate a contrary trend.
S&P 500 Index futures (left) vs. Bitcoin/USD (right). TradingView
Bitcoin’s lack of bullish momentum above $78,000 mirrors the S&P 500 Index’s struggle near 7,200. The high cost of logistics and the impact on consumer spending are some reasons for traders’ skepticism. Investors also doubt the ROI of AI investments by technology firms. according Yahoo Finance is a great place to start.
The bulls are lacking in confidence as Bitcoin futures prices show.
The Bitcoin perpetual-futures funding rate has turned negative since Wednesday, despite the reasons why investors are cautious. The rate was negative on Wednesday after a short neutral to bullish phase Tuesday. In a healthy marketplace, the rate typically stays between 6% to 12% in order to cover capital expenses. Therefore, buyers usually pay a maintenance fee for their positions. Negative rates indicate a move towards sellers.
Bitcoin annualized funding rates for perpetual futures. Source: Laevitas
Bitcoin perpetual-futures funding rates have remained mostly positive over the past 2 weeks. This shows an increase in demand for leveraged, short positions. Although this data suggests that buyers are not confident, further analysis of whales’ positions is needed. Top traders long-to-short ratio Data from all exchanges is available, including spot, futures, and margin data. This gives a comprehensive view.
Source: Coinglass. Long-to-short trading ratio of top traders on Binance and OKX. Source: Coinglass
Binance’s professional long-to-short traders ratio stood at 0.80. It was a small improvement on the 0.75 levels recorded Tuesday but it is still slightly bearish. Since Friday, OKX’s top traders briefly expressed bullish sentiment, though these were temporary shifts. There is still no sign that the whales have become more bearish as the ratio of longs to shorts has remained constant over the last week.
In its latest statement, the US Federal Reserve noted that Wednesday’s meeting was a “meeting of interest”. “inflation is elevated, in part reflecting the recent increase in global energy prices.” Four members of the FOMC supported a 0.25 percent cut, but four others voted to maintain rates. According CNBC reported that four FOMC member have dissented for the first since October 1992.
Related: Bitcoin’s recent rally is largely fueled by Strategy purchases: Bitwise’s Hougan
Bitcoin bulls are not necessarily bearish, even though Strategy (MSTR US), which continues its acquisitions, is. In the past four weeks Strategy has acquired 56,235 BTC. This move was supported by its perpetual preferred securities, STRC. The company has 818,334 BTC in its possession, which is more than BlackRock’s position on IBIT exchange-traded fund (ETF).
As indicated by the exchange’s long-to-short rates, professional traders were unmoved Wednesday by Bitcoin’s drop to $75,000. The persistently negative funding rate for Bitcoin futures indicates that the sentiment is still cautious. Bitcoin traders continue to be primarily driven by the earnings of tech companies and macroeconomic indicators.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: cointelegraph.com
