InvestorCrypto.net - Bitcoin BTC has experienced a decrease of $69,075 in its ticker price, facing a moderate correction to $68,430 on the 27th of March after failing to break through the $71,000 mark.
Data from Bitcoin derivative markets revealed a decline in bullish sentiment among professional traders over the past week, indicating that the $69,000 level may not hold. The inflow of Bitcoin spot ETFs will determine the price of BTC.
Despite a rally from $63,800 to $70,000 in five days leading up to the 27th of March, only $151 million in short leverage positions were forcibly closed in the BTC futures market.
This suggests that sellers remain cautious, even amidst a significant net outflow of $888 million from US Bitcoin spot ETFs last week.
On a positive note, Bitcoin has shown resilience in recovering from a 17.6% drop from $73,757 on the 14th of March to $60,795 on the 20th of March without causing panic among spot ETF investors.
However, some market observers argue that the main driver behind Bitcoin reaching new highs before the upcoming hard fork in April is the unexpected inflow of spot ETFs, highlighting the importance for bulls to monitor this trend.
Encouragingly for Bitcoin enthusiasts, there has been a reversal in the flow of spot ETFs this week, with a total net inflow of $418 million recorded on the 26th of March.
This is not due to a decrease in outflows from Grayscale's GBTC, indicating genuine institutional demand even as Bitcoin prices remain just 4% below their peak. However, this does not guarantee professional traders that $69,000 will serve as a support level.
Analysts can differentiate whether whales and arbitrageurs are taking bullish or bearish stances by analysing aggregate positions across spot, perpetual, and quarterly futures contracts. The long-short ratio of top BTC traders on exchanges, over a 12-hour period, can provide valuable insights into market sentiment.
At Binance, the long-short ratio among professional traders stands at 1.50, supporting long positions on the 22nd of March, a figure that has slightly decreased to 1.42.
Conversely, sentiment was much more bullish at OKX on the same date, with a long-short ratio of 3.22, which has since decreased to 1.49 supporting buy positions. This indicates a significant decrease in optimism among top traders, despite a 9.5% price increase during this period, suggesting other factors may be dampening bullish sentiment.
Global economic concerns and mixed market signals are impacting Bitcoin's price performance. Some analysts argue that the global economic downturn is affecting Bitcoin's performance, especially after the S&P 500 index failed to sustain its all-time high of 5,320 reached on the 21st of March.
Uncertainty surrounding the Federal Reserve's interest rate decisions for 2024 has caused investors to lose confidence; a decrease in interest rates is generally viewed positively for risk assets like Bitcoin. According to the CME FedWatch Tool, reflecting market expectations of fixed income, there is only an 8% chance of a rate cut at the Federal Reserve meeting on the 1st of May.
Furthermore, analysts warn that a decrease in the Fed's interest rates may signal underlying issues compared to prosperity. Paul Hickey, co-founder of Bespoke Investment Group, expressed concerns about the lack of income growth being the biggest risk to the stock market. He also highlighted concerns about the overemphasis on artificial intelligence, which has significantly driven recent stock market gains.
Bitcoin's top trader data shows a decrease in preferences for long leverage positions, contrary to an increase in comfort with declines. This shift may stem from all-time highs across various asset classes, including gold, US stocks, Bitcoin, the Nikkei 225 index in Japan, and livestock, indicating market anticipation of a weaker US dollar against scarce resources.
The decreased interest in BTC long leverage should not cause concern for investors, or signal that Bitcoin will trade below $69,000, as it likely reflects broader economic recession concerns and external pressures, such as the US Department of Justice's charges against KuCoin exchange on the 26th of March and discussions in the European Parliament committee regarding restrictions on cryptocurrency payments from self-hosted wallets.
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