Bitcoin‘s price underwent a minor correction, dropping to $68,430 on March 27, after it struggled to surpass the $71,000 mark.
This movement comes amidst signs of waning bullish sentiment among professional traders, highlighted by derivatives data.
The failure to breach this level raises concerns about the stability of the $69,000 price point.
Despite the price rallying from $63,800 to $70,000 in the five days leading to this dip, the Bitcoin futures markets saw a mere $151 million in leveraged short positions liquidated.
This cautious stance by bears is noteworthy, especially considering the significant $888 million withdrawal from U.S. Bitcoin spot ETFs the previous week.
Bitcoin, however, showcased its resilience by bouncing back from a substantial 17.6% fall mid-March, without instigating panic among spot ETF investors.
This resilience was thought to be driven by unexpected inflows into spot ETFs, marking an important trend for bulls ahead of the anticipated April Bitcoin halving.
March 26 reversed the outflow trend, with spot ETFs experiencing $418 million in net inflows, signifying genuine institutional interest despite Bitcoin’s price lingering close to its peak.
Yet, the community remains uncertain if the $69,000 mark will hold as a strong support level.
The sentiment among professional traders has shown a decrease in optimism.
For instance, Binance’s long-to-short ratio among professional traders slightly fell from 1.50 to 1.42, indicating a decrease in bullish sentiment.
Similarly, on OKX, a significant drop in the long-to-short ratio was observed, pointing to a broader sentiment shift among top traders.
This declining optimism could be attributed to broader economic concerns, including the performance of the S&P 500 index and uncertainty over the U.S. Federal Reserve’s interest rate decisions for 2024.
The prospect of rate cuts, typically beneficial for risk-on assets like Bitcoin, seems unlikely in the near term, with the fixed-income markets betting against a rate reduction at the Fed’s upcoming May 1 meeting.
Analysts, including Paul Hickey from Bespoke Investment Group, express concerns over various factors impacting the market, such as the potential risks associated with a lack of earnings growth and the overemphasis on artificial intelligence within the stock market.
Furthermore, the shift in trading preferences among Bitcoin’s top traders, moving away from leveraged long positions, reflects a broader caution influenced by global economic downturns, regulatory actions, and discussions on limiting cryptocurrency transactions.
This cautious sentiment, however, does not necessarily predict a drop below the $69,000 threshold, instead reflecting wider economic and regulatory concerns.
To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.
