Bitcoin briefly reached the $72,000 resistance on June 7 before falling back down to $69,000. Two key indicators, including the long-to-short metric of top traders on exchanges, suggest that Bitcoin investors are feeling less optimistic. Could this mean the end of the Bitcoin bull market, at least in the short term?
Bitcoin and gold both saw declines as the S&P 500 hit a new all-time high on June 7 following a strong increase in nonfarm payroll jobs in the United States. A robust labor market typically benefits credit and consumption, ultimately aiding publicly listed companies. Despite some setbacks in the consumer sector of U.S. stocks, the tech sector compensated for the losses.
Robert Sockin, a senior global economist at Citi, warned that keeping interest rates above 5.25% for too long could increase the risk of a recession. However, the most recent U.S. unemployment data suggests no immediate danger, with the current rate at 4%. Investors are now pricing in a 51% chance of a rate cut by the Fed in September, down from 69% previously.
Not only Bitcoin, but other asset classes like gold and fixed-income were also impacted by the macroeconomic data and the lowered expectations of interest rate cuts. While gold prices dropped and the U.S. Treasury yield rose, the stock market remained resilient, possibly due to the substantial cash holdings of major U.S.-listed companies.
Bitcoin’s top traders have been reducing their bullish positions following the rejection of the $72,000 price resistance. By analyzing data from BTC futures markets, one can see that the sentiment of whales may have shifted. The long-to-short ratio of top traders at Binance and OKX has decreased, indicating a less bullish stance compared to previous weeks.
While some metrics show a decrease in bullish sentiment, others like the premium for stablecoins in China suggest a modest increase in retail trader demand. The USD Coin premium in China has remained stable, indicating that both whales and retail traders are not panic-selling despite the recent price correction in Bitcoin.
Overall, this article is meant for informational purposes and should not be taken as legal or investment advice. The opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.