Main takeout:
Bitcoin’s struggle to overtake $ 105,000 is still challenging due to the US macroscopic backworm.
The strength of institutional investors’ steady inflows and the support of $ 100,000 is to increase confidence in Bitcoin.
Bitcoin (BTC) has struggled to cut more than $ 105,000 since May 10, and traders have questioned whether their optimism has disappeared. The BTC was able to recover the level of $ 104,000, but as pointed out by the decrease in the Bitcoin Gift Premium, the demand for long leverage has dropped sharply.
On May 14, the annual Bitcoin futures premium reached 7%, but fell to 5%, which is close to neutral, and the BTC is consistent with about $ 84,500 four weeks ago.
Since the price of Bitcoin is being closely related to the movement in the stock market, the decrease in demand for the strength of leverage seems to be associated with extensive macroeconomic uncertainty.
The S & P 500 FUTURES reversed its initial weaknesses on May 15 and matched Bitcoin from $ 101,800 to $ 104,000. Investors are convinced that the US Treasury will inject liquidity after warning that the “supply shock” can maintain interest rates longer than expected.
There are also signs of economic weakness. The US Labor Statistics Bureau predicted that the producer price index in April fell 0.5% from last month, while the economists surveyed by FactSet were expected to increase 0.2%. According to Reuters, investors’ restricted risk appetite is affected by continuous global trade tension because the US -central customs contract remains a temporary solution.
After reaching 4.55%on May 14, the 10 -year return on the US Treasury’s return decreased to 4.45%, increasing the demand for fixed income last week, reversing the trend last week. Historically, Bitcoin tends to show better performance when government bond yields rise, which reduced the trust in the financial management capacity of the Treasury.
Bitcoin’s rally is $ 105,000 for the macroeconomic trend.
It is helpful to analyze the demand for bitcoin options to simply avoid leverage or assess whether it is actively betting on price drops. Typically, the duration of the weakness is to push the BTC Delta distortion indicator over the neutral 6% threshold.
Contrary to expectations, the Bitcoin PUT (SELL) option is traded at a discounted price compared to the phone (purchase) option, indicating a strong trust in the level of $ 100,000. But the optimism on May 14 is gone, and the indicator is now neutral -4%.
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Since the price of Bitcoin is closely reflected with the US stock market, the possibility of destruction of more than $ 105,000 relies greatly on the development of macroeconomics such as the trend of the US Federal Reserve’s BOK and the risk of recession. In particular, Bitcoin’s high correlation with S & P 500 does not last for more than two months.
On May 14, the net inflow of $ 320 million in the US Bitcoin Exchange Trading Fund (ETF) pointed out continuous institutional demand. This suggests that investors are gradually changing their perception of Bitcoin from risk assets to non -correlated tools, which can reduce the possibility of rapid price modification even if there is no strong enhancement.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.