Are Bitcoin Traders Losing Hope? The top trader’s figures hit a two-week low.
Bitcoin (BTC) briefly struggled with resistance at $72,000 on June 7, but the intraday gains quickly evaporated, sending the cryptocurrency price down to $69,000. More worryingly, two indicators, including the exchange’s Top Trader Short and Long Indicators, suggest that Bitcoin investors are less optimistic. Is the Bitcoin bull market over, at least in the short term?
Bitcoin and gold fell amid record highs for the S&P 500.
The S&P 500 hit an intraday high on June 7 after the U.S. reported a 272,000 increase in nonfarm payrolls in May. This number significantly exceeds the previous month’s figure of 165,000 jobs. A strong labor market is generally good for credit and consumption, and therefore good for listed companies. People are more likely to spend when the job market is resilient, regardless of the cost of capital.
The relationship between job creation and corporate profits is particularly good. In particular, wages in May announced by the U.S. Bureau of Labor Statistics increased by 0.4% compared to the previous month, and the participation of older workers aged 25 to 54 reached the highest level. 83.6%, highest level in 22 years Despite the decline in US consumer sector stocks today, the technology sector has more than compensated for the move.
Robert Sorkin, Citigroup’s chief global economist, pointed out that the longer the U.S. Federal Reserve keeps interest rates above 5.25%, the higher the risk of a recession, as reported by Yahoo Finance. However, according to the most recent U.S. unemployment data (4%), there is no sign of imminent danger. According to the CME FedWatch Tool, investors now have a 51% chance that the Federal Reserve will cut interest rates by September, down from 69% the previous day.
Bitcoin was not the only asset class negatively impacted by macroeconomic data and declining expectations of interest rate cuts among investors. Gold flirted with $2,390 in the early morning hours of June 7 before plummeting to $2,300. Likewise, the U.S. Treasury’s two-year yield has surged from 4.74% to 4.87% over the same period, indicating traders are selling bond positions.
It may seem inconsistent for Bitcoin to fall behind gold and bonds during a stock market split, but consider that the largest publicly traded companies in the U.S. collectively hold $3.6 trillion in cash and equivalents. These holdings may be utilized to earn money market fund returns or in share repurchase programs. Basically, even if corporate profits deteriorate, the impact on prices is much smaller than for other assets.
Top Bitcoin traders have recently reduced their bullish bets.
To understand whether the rejection of $72,000 price resistance has affected whale sentiment, we need to analyze data from the BTC futures market. Top traders’ long/short ratios consolidate positions across spot, perpetual, and monthly futures contracts. A higher ratio means that long (buy) positions are preferred, while the opposite means that professional traders prefer sell (sell) contracts.
Binance’s current long-short ratio is 1.35, a less optimistic stance compared to a week ago on May 31. This indicator was at 1.58, favoring the longs. Likewise, OKX top traders are less optimistic compared to May 31 as the short-short ratio decreased from 1.79 to 1.22. On average, this indicator has fallen to its lowest level in more than two weeks, which is somewhat worrying but still favors bullish bets in absolute terms.
However, other indicators, such as the stablecoin premium in China, show a modest increase in demand from retail traders. Excessive retail inflows typically cause stablecoin premiums to soar above 1.5%, while bear markets lead to discounts.
China’s USDC premium remained just above the 1% neutral threshold, completely ignoring the BTC price correction on June 7. From one perspective, bulls can take comfort in the knowledge that neither whales nor retail traders are panic selling. These data support the idea that Bitcoin’s top traders’ short and long interest rates may eventually improve as the $69,000 support shows its strength.
This article is written for general information purposes and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
