Takeaways from the conference:
- Bitcoin’s support floor of $76,000 has been strengthened as top traders increased their long-to short ratios.
- Bitcoin’s immediate breakout potential has been capped to $82,000 by macroeconomic pressures as well as persistent Bitcoin ETF withdrawals.
Bitcoin (BTC), despite flirting with $78,000 Thursday, was unable to keep up its bullish momentum following a poor outlook by US retailer Walmart as well as signs of an increasingly restrictive US monetary policies. Professional Bitcoin traders have increased their exposure to bullish Bitcoin despite weaker macroeconomic conditions. What’s the next move?
Top traders’ Bitcoin long-to-short position at Binance & OKX. Source: CoinGlass
The long-to short ratio of top traders has risen to the highest in two weeks. This indicates a growing level of confidence about $76,000 as a support. Binance traders increased their longs, or buys, for the past three days. OKX traders reduced shorts, or sells, between Wednesday to Thursday. In absolute terms, however, the indicator is still neutral.
Fears of US interest rate increases prompted by a worsening economy and rising oil prices
This lack of confidence is partly due to the worsening outlook for economic growth. Walmart (WMT US), which issued weak 2027 forecasts due to the persistently high price of oil, saw its share prices decline by 7%. Walmart CFO John Furner said Low-income consumers can be defined as “navigating financial distress.” Due to its huge $178 billion in quarterly sales, the company is a good proxy for US Retail data.
Brent crude oil has been sustained at $95 over the last month due to the prolonged conflict in Iran, and the partial closing of the Strait of Hormuz. Due to the rising inflationary pressure, there is less room for maneuvering by the US Federal Reserve. Now traders anticipate interest rate hikesThis is a dramatic change from expectations for the month before.
FOMC target interest rates for Sept. 20,26. Source: CME Group FedWatch Tool
Based on futures contracts for government bonds, the implied probability of an interest rate increase by September has risen to 37% from 0% a month ago. Thus, regardless of the strength of the S&P 500 Index, investors anticipate accelerated growth in the monetary base, as higher interest rates negatively affect the $39 trillion US government debt.
Bitcoin/USD and Bitcoin/USDT are traded at the major exchanges. TradingView/Cointelegraph
Bitcoin was traded on Coinbase at a USDT price that is 0.10% lower than the Bitcoin exchange prices. This Coinbase Bitcoin negative premium is often associated with weaker institutional demand. It aligns well with the net $2.07 billion outflows in US Bitcoin ETFs since May 12th.
Related: Chance of new Bitcoin lows ‘extremely slim’ as long-term holders’ supply tops 15M BTC
Bitcoin perpetual Futures Annualized Funding Rate Source: Laevitas
Since Monday, the Bitcoin perpetual futures’ funding rate is at neutral levels. This reverses the previous week’s trend. Although the current rate of 7% is not bullish, it represents a significant turnaround from last May 14, when sellers paid shorts 13% in order to maintain their open positions.
The odds that Bitcoin will continue to rise in value up until $82,000 are low, given the uncertainty of the global economy. The reduction of top traders’ positions in short and the balanced funding rate for perpetual futures indicate that the bulls have gradually built confidence in $76,000 as a support level.
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Source: cointelegraph.com
