Bitcoin Futures Are Bearish Despite Inflows of ETFs

The key takeaways

• Bitcoin futures premium fell to a three-month low even though prices were only 8% off their high.

• BTC option metrics have turned negative, despite the stock market’s resilience under macroeconomic pressure.

BitcoinBTCThe derivatives indicators are on the edge of a bearish trend despite BTC’s price being just 8% off its record high. The cryptocurrency market is known to be volatile, and especially for those traders who are trading leveraged contracts. However, the recent lack of optimism seems somewhat unusual.

BTC dropped to $102,400 because of a deteriorating macroeconomic environment?

Bitcoin derivativesIt could simply be related to the fear of the unstable socio-economic situation.

Under neutral conditions, monthly Bitcoin futures To compensate for the long settlement period, traders typically set their prices 5% to 15 % above those of spot markets. Since June 12th, this indicator is below the neutral threshold. This was after a rejection of $110,000.

Even though Bitcoin was trading at $105,450 on 5th June, the metric is worse than it was two weeks ago. On Thursday, the futures premium dropped below 4%. This is its lowest level for three months. The BTC Futures Metric is lower now than it was in April when Bitcoin fell 10% within 24 hours, to $74,440.

Bitcoin Options Markets can be used to confirm if the fear is only confined to futures monthly contracts. If traders expect a crash in the price, they will pay a premium for put options (sell). This increases the skew value above 5%. The indicator moves below -5 % during periods of bullish market.

Bitcoin option skew stands currently at 5%. It is just on the cusp of neutral or bearish sentiment. The indicator was at a bearish level of -5% on June 9 after Bitcoin rose from $105,500 up to $110 500. It shows that traders are growing increasingly frustrated with Bitcoin’s performance.

Investor sentiment was impacted by tensions in Middle East, but the Russell 2000 US Small-Cap index maintained its 2,100 level. Recession risks Interest rates in the United States remain at a level above 4,25 %, despite persistent pressures from inflation.

Related: Bitcoin rally to $120K possible if Fed eases rates due to tariff and war impact

Bitcoin’s institutional appeal is strong, but it contrasts with the derivatives market

Cryptocurrency investors are notorious for their emotional swings. They often sell in panic when there is uncertainty, or show excessive optimism during bull markets. Bitcoin derivatives are currently weak, suggesting traders do not believe that $100,000 will be able to hold.

Incredibly, the demand for institutional investment has not waned during this time. US-listed Bitcoins spot exchange-traded funds Net inflows into ETFs totaled $5.14 Billion in the 30-day period ending June 18th. However, there are also firms like StrategyMetaplanet H100 Group The Blockchain Group BTC in large quantities during this period.

What will restore the confidence of Bitcoin traders is still unknown. The longer BTC stays close to the psychological $100,000 level, however, the more bearish the traders will be.

The article does not provide legal advice or investment recommendations and it is intended for informational purposes only. These are solely the opinions, views, and thoughts of the author and may not reflect the opinions and views of Cointelegraph.