The price of Bitcoin (BTC) has been showing signs of struggling around the $30,000 mark. However, numerous aspects indicate that bitcoins are at a disadvantage. The price fluctuations observed in recent weeks seem to have a significant impact on the sentiments of investors. Regardless of Bitcoin’s Year-to-Date (YTD) gains of 82%, short-term market movements have led to many quick corrections. This particular sentiment extends to other cryptocurrencies as well.
The recent surge in Bitcoin’s price is suspected to be driven by several spot Bitcoin exchange-traded fund (ETF) requests. Another contentious issue is the anticipated departure of Binance’s top compliance officers due to the regulatory hostilities the exchange is facing. This, coupled with a stoppage in Euro banking payment gateway services by September, could significantly impact deposits and withdrawals.
Interestingly, the US Treasury curve reached its deepest inversion since 1981 earlier this month. This inversion reflects a 4.94% yield on the 2-year note as compared to the 3.86% yield on 10-year trading. This phenomenon does not happen often and is keenly watched by investors, given that it has been a precursor to past recessions.
All these events have had an impact on Bitcoin’s price and the sentiments of investors. Despite these overarching trends, Bitcoin traders have shown strength in margin, options, and futures markets. The stablecoin/BTC margin lending ratio has risen from favoring longs 20x on July 1 to a current 29x ratio on July 7. This growth indicates a rise in the confidence of traders in margin lending. However, the ratio remains within a neutral-to-bullish range.
The bearish market, no doubt, will be faced with resistance given the growing expectation of an ETF approval. This assertion is backed by how crypto has begun to gain recognition as a respectable asset class among institutional investors. Some of the world’s largest asset fund managers have multiple Bitcoin ETF filings.
Finally, despite the anticipation of a possible retracement in Bitcoin’s price, the resilience of bullish conviction among traders coupled with the lack of excessive optimism in BTC margin, options, and futures markets, paints a challenging picture for those expecting a sharp price correction due to regulatory or recessionary concerns.
Source: Cointelegraph
