Bitcoin briefly touched the $72,000 resistance level on June 7 before experiencing a sudden drop to $69,000. This decline, coupled with two key indicators, including the long-to-short metric of top traders on exchanges, suggests a decrease in optimism among Bitcoin (
BTC
) investors. This raises the question – is the Bitcoin bull market coming to a halt, at least in the short term?
On the same day, both Bitcoin and gold prices saw a decline as the S&P 500 index reached a new all-time high following a positive report on job growth in the United States. The strong labor market is generally favorable for credit and consumption, benefiting publicly traded companies. The increase in wages and participation of prime-age workers further reinforced this positive trend, despite a slight dip in the consumer sector stocks.
Robert Sockin, a senior global economist at Citi, warned that keeping interest rates above 5.25% for an extended period could heighten the risk of a recession. However, with the current U.S. unemployment rate at 4%, there is no immediate danger of a downturn. Investors are now pricing in a 51% chance of a rate cut by the Federal Reserve in September, down from 69% the day before.
Bitcoin, along with other asset classes, felt the impact of this macroeconomic data and reduced expectations of interest rate cuts. Gold prices dropped significantly, while the U.S. Treasury two-year yield saw an increase, indicating a shift in traders’ positions. Despite this, the stock market remained resilient, thanks to the substantial cash reserves held by major U.S. companies.
In the world of Bitcoin trading, a closer look at futures markets reveals that top traders have scaled back their bullish bets following the rejection of the $72,000 price level. The long-to-short ratio among these traders has decreased, indicating a less optimistic sentiment compared to previous weeks. However, metrics like the premium for stablecoins in China show a slight uptick in retail demand, suggesting that panic-selling is not a major concern among both whales and retail traders.
Overall, while there are signs of caution in the market, particularly among Bitcoin traders, the support at $69,000 remains a crucial level to watch. The data indicates that a turnaround in sentiment may be on the horizon, providing some reassurance to bullish investors.
It is important to note that this article is for informational purposes only and should not be considered as legal or investment advice. The opinions expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.