Bitcoin made a brief attempt to break through the $72,000 resistance level on June 7, but its gains were short-lived as the cryptocurrency fell back to $69,000. Concerns arose as two key indicators, including the long-to-short metric of top traders on exchanges, indicated a decline in optimism among Bitcoin investors. Is the bullish trend for Bitcoin coming to an end, at least in the near future?
Bitcoin and gold both experienced declines as the S&P 500 index reached a new all-time high on June 7 following a strong report of 272,000 new nonfarm payroll jobs in the United States for May. A robust labor market is generally positive for credit and consumption, benefiting listed companies. The relationship between job creation and corporate earnings is particularly strong, as evidenced by a rise in wages and increased participation of prime-age workers. Despite a drop in consumer sector stocks, the tech sector managed to offset the losses.
Economist Robert Sockin from Citi warned of a potential recession if the U.S. Federal Reserve maintains interest rates above 5.25%. However, the current U.S. unemployment rate of 4% suggests no immediate risk. Market expectations of a rate cut by the Fed in September have decreased to 51%, down from 69% previously.
The impact of macroeconomic data and reduced expectations of interest rate cuts were felt across various asset classes, with gold and U.S. Treasury yields both falling. While Bitcoin declined alongside gold and fixed-income assets, the stock market remained resilient due to the substantial cash reserves held by major U.S. companies.
Recent data from Bitcoin futures markets indicates a decrease in bullish sentiment among top traders following the rejection from the $72,000 resistance level. The long-to-short ratio on exchanges like Binance and OKX has shifted towards a less optimistic stance, although it still favors bullish bets overall. Despite this, retail trader demand in China, as indicated by the premium for stablecoins, has shown a slight increase, suggesting that panic selling is not prevalent among both whales and retail traders.
Overall, the data suggests that Bitcoin’s top traders may regain confidence as the $69,000 support level proves its strength. This article serves as general information and should not be considered as legal or investment advice. The opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.